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The Foreclosure Process and Laws for Hawaii and All States

For more information on Maui short sales and foreclosures, view my gallery

Foreclosure Process and Laws for All States

Traversing the foreclosure process is the legal remedy by which lenders reclaim their collateral when a borrower defaults on a mortgage. Each state has their own specific laws regarding their foreclosure process.

The “foreclosure process” is similar, but different from state to state in two main categories:

  • Non-Judicial Foreclosure—no court approval or court process
  • Judicial Foreclosure—requires court filings and court appearances

Process for Non judicial Foreclosure:

Foreclosure companies perform non judicial foreclosures without going through the court system. The lender chooses a private foreclosure company to act as trustee and perform the foreclosure process, which can take 30 days to 1 year depending on the state laws, and other factors could extend this process. The non judicial process is a much faster, more efficient, and less expensive process for the lender than a judicial foreclosure.

In the beginning of the non judicial foreclosure process, a notice of default is recorded at the county recorders office, noticing the borrower and any junior lien holders, and the notice of default is published in local newspapers. The notice is usually published several times over a period of weeks or months. Usually, there is a waiting period which ranges from weeks to months for the borrower to cure the default, depending on the state laws.

The next step is announcing the trustee sale/foreclosure sale, by recording a notice of sale at the recorders office, which is published in the local newspaper along with auction sale date and property address. Following thereafter, the trustee sale/foreclosure sale is conducted by an auctioneer, where the public is allowed to bid on the defaulted property, and it is sold to the highest bidder.

This auction is usually an all cash auction, where bidders must qualify to bid by presenting the auctioneer with a cashiers check prior to bidding. The winning bidder then pays the auctioneer by cashiers check immediately afterward. In the event there are no bidders, the property refers back to the bank. The foreclosure trustee prepares and delivers a trustee’s deed, granting title to the winning bidder within the next week, and it is finally recorded at the county recorders office.

Process for Judicial Foreclosure:

Approximately half of the 50 states require properties to go through the judicial foreclosure process, yet, this process is allowed in almost all states. A judicial foreclosure is a drawn out and more expensive process. Again, you have a series of court filings, appearances before judges, noticing the borrowers, and junior lien holders.

In addition, the lender is required to hire an attorney and prove in court that they have the right to take possession of a property. The judge gives the lender permission to proceed with a foreclosure auction/sheriff’s sale, which is generally supervised by the court ending the foreclosure process.

Many states require a judicial foreclosure process, and some states allow both the judicial or non-judicial foreclosure process. With the time and money saved, lenders usually prefer the faster non-judicial process although, not always available.

There are unique circumstances where a lender will choose a judicial process, especially the foreclosure of a valuable commercial property when litigation is likely. Choosing the judicial process may guarantee a lender certain advantages over the shorter non judicial process, such as deficiency judgments and sometimes disadvantages such as right of redemption.

Foreclosure Basics by State:

State Security Instrument Foreclosure Type Initial Step Time Line in Months Right of Redemption (Months) Deficiency Timeline + Redemption (Months)
ALABAMA Mortgage Nonjudicial Publication 1 12 Allowed 13.00
ALASKA Trust Deed Nonjudicial Notice of Default 3 0 Allowed 3.00
ARIZONA Trust Deed Nonjudicial Notice of Sale 3 0 Allowed 3.00
ARKANSAS Mortgage Judicial Complaint 4 0 Allowed 4.00
CALIFORNIA Trust Deed Nonjudicial Notice of Default 4 0 Prohibited 4.00
COLORADO Trust Deed Nonjudicial Notice of Default 2 2.5 Allowed 4.50
CONNECTICUT Mortgage Strict Complaint 5 0 Allowed ??
DELAWARE Mortgage Judicial Complaint 3 0 Allowed 3.00
D.C. Trust Deed Nonjudicial Notice of Default 2 0 Allowed 2.00
FLORIDA Mortgage Judicial Complaint 5 0 Allowed 5.00
GEORGIA Security Deed Nonjudicial Publication 2 0 Allowed ??
HAWAII Mortgage Nonjudicial Publication 3 0 Allowed 3.00
IDAHO Trust Deed Nonjudicial Notice of Default 5 0 Allowed 5.00
ILLINOIS Mortgage Judicial Complaint 7 0 Allowed 7.00
INDIANA Mortgage Judicial Complaint 5 3 Allowed 8.00
IOWA Mortgage Judicial Petition 5 6 Allowed 11.00
KANSAS Mortgage Judicial Complaint 4 12 Allowed 16.00
KENTUCKY Mortgage Judicial Complaint 6 0 Allowed 6.00
LOUISIANA Mortgage Exec.Process Petition 2 0 Allowed ??
MAINE Mortgage Judicial Complaint 6 0 Allowed 6.00
MARYLAND Trust Deed Nonjudicial Notice 2 0 Allowed 2.00
MASSACHUSETTS Mortgage Judicial Complaint 3 0 Allowed 3.00
MICHIGAN Mortgage Nonjudicial Publication 2 6 Allowed 8.00
MINNESOTA Mortgage Nonjudicial Publication 2 6 Prohibited 8.00
MISSISSIPPI Trust Deed Nonjudicial Publication 2 0 Prohibited 2.00
MISSOURI Trust Deed Nonjudicial Publication 2 0 Allowed 2.00
MONTANA Trust Deed Nonjudicial Notice 5 0 Prohibited 5.00
NEBRASKA Mortgage Judicial Petition 5 0 Allowed 5.00
NEVADA Trust Deed Nonjudicial Notice of Default 4 0 Allowed 4.00
NEW HAMPSHIRE Mortgage Nonjudicial Notice of Sale 2 0 Allowed 2.00
NEW JERSEY Mortgage Judicial Complaint 3 0.25 Allowed 3.25
NEW MEXICO Mortgage Judicial Complaint 4 0 Allowed 4.00
NEW YORK Mortgage Judicial Complaint 4 0 Allowed 4.00
NORTH CAROLINA Trust Deed Nonjudicial Notice Hearing 2 0 Allowed 2.00
NORTH DAKOTA Mortgage Judicial Complaint 3 1 Prohibited 4.00
OHIO Mortgage Judicial Complaint 5 0 Allowed 5.00
OKLAHOMA Mortgage Judicial Complaint 4 0 Allowed 4.00
OREGON Trust Deed Nonjudicial Notice of Default 5 0 Allowed 5.00
PENNSYLVANIA Mortgage Judicial Complaint 3 0 Allowed 3.00
RHODE ISLAND Mortgage Nonjudicial Publication 2 0 Allowed 2.00
SOUTH CAROLINA Mortgage Judicial Complaint 6 0 Allowed 6.00
SOUTH DAKOTA Mortgage Judicial Complaint 3 6 Allowed 9.00
TENNESSEE Trust Deed Nonjudicial Publication 2 0 Allowed 2.00
TEXAS Trust Deed Nonjudicial Publication 2 0 Allowed 2.00
UTAH Trust Deed Nonjudicial Notice of Default 4 0 Allowed 4.00
VERMONT Mortgage Judicial Complaint 7 0 Allowed 7.00
VIRGINIA Trust Deed Nonjudicial Publication 2 0 Allowed 2.00
WASHINGTON Trust Deed Nonjudicial Notice of Default 4 0 Allowed 4.00
WEST VIRGINIA Trust Deed Nonjudicial Publication 2 0 Prohibited 2.00
WISCONSIN Mortgage Judicial Complaint Varies 0 Allowed 12.00
WYOMING Mortgage Nonjudicial Publication 2 3 Allowed 5.00

Original source of table: http://www.foreclosureforum.com/basics.html. The foreclosure process and the laws are constantly changing. Utilize the table above, but check with your state for an updated version.

Go forth and conquer!

Our offices are working upwards of 30 pre-foreclosures (properties not listed in the MLS) at any given time. To protect homeowners or tenants currently still living in bank owned properties, and because of MLS rules, we are unable to give out addresses of our unlisted pre-foreclosures.

However, as bank owned properties are able to be listed on the MLS, and if you answer a few questions below, we can contact you first when a property of your dreams is about to be listed. Also, be sure to check out my gallery on Maui Short Sales.

Please call or send me this information:

  1. Assets you desire in a property (i.e. acreage with a house and cottage, condo, 3 bed/2 bath, swimming pool, vacation rental on the golf course, etc).
  2. Pre-approval letter or proof of cash. I would be happy to send you names of loan officers, so that you can be pre-approved and ready to make an offer.
  3. Preferred location (i.e. W. Maui, S. Maui, or an actual town such as Haiku, Kapalua, Kihei, Wailea, or a zip code).
  4. Phone number, name, and email address.

Kathleen Wilson, SSCP – Short Sale Certified Professional – Five Star Institute, RECP – REO Certified Professional – Five Star Institute and SFR – Short Sale Foreclosure Resource.

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[…] The Foreclosure Process and Laws for Hawaii and All States … […]

Elizabeth

May 3, 2011

Interesting… thanks for the tips and help!

Elizabeth

May 3, 2011

Interesting… thanks for the tips and help!

David Buck

May 13, 2011

Great resource Kathleen

David Buck

May 13, 2011

Great resource Kathleen

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Ron Margolis

May 15, 2011

No redemption period in Hawaii right?

Ron Margolis

May 15, 2011

No redemption period in Hawaii right?

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