What is the difference between judicial and non-judicial foreclosure?

In North Carolina, properties with mortgages or deed of trust that are not being paid are subject to foreclosure. There are two primary ways that foreclosure can take place in the state; judicial foreclosure and non-judicial foreclosure. Judicial foreclosure is when the lender takes the defaulting borrower to court. The lender must prove that the borrower failed to meet the terms of the mortgage contract, and the court will issue a judgment against the borrower. The court will then require the borrower to pay the lender the amount of the defaulted loan. If they fail to do this, the court will then order a foreclosure sale of the property. Non-judicial foreclosure is when the lender regains possession of the property through foreclosure without going to court. This is done through a power of sale clause in the loan documents, which allows the lender to repossess the property if the borrower fails to make payments as agreed. The lender will then keep the proceeds of the sale of the property to cover the amount of the defaulted loan. These are the main differences between judicial and non-judicial foreclosure in North Carolina; judicial foreclosure involves the court making a judgment against the borrower, while non-judicial foreclosure involves the lender regaining possession of the property through a power of sale clause in the loan documents.

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What is the difference between judicial and non-judicial foreclosure?

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