Judicial Foreclosure

Updated 2026-05-17

Judicial foreclosure is a type of foreclosure process that requires the lender to file a lawsuit in court to obtain a judgment of foreclosure. This method is typically used in states where the mortgage instrument does not contain a "power of sale" clause, or where state law mandates court involvement.

Process Overview

1. Complaint Filing: The lender files a complaint with the court, naming the borrower and any other parties with an interest in the property (e.g., junior lienholders).
2. Service of Process: The borrower is formally served with the complaint, giving them notice of the lawsuit.
3. Borrower's Response: The borrower has an opportunity to respond to the complaint, raise defenses, or challenge the foreclosure.
4. Court Judgment: If the court finds in favor of the lender, it issues a judgment of foreclosure, ordering the sale of the property.
5. Foreclosure Sale: The property is then sold at a public auction, typically conducted by a sheriff or court-appointed official.
6. Confirmation of Sale: In some jurisdictions, the court must confirm the sale.

Due to the court involvement, judicial foreclosures often have longer timelines compared to non-judicial foreclosures. Government Sponsored Enterprise (GSE)'s allowable time frames for judicial foreclosures reflect this, with some states having timelines exceeding 1,000 days (e.g., Maine at 1,320 days, New York City at 2,190 days).

Fannie Mae Guidelines

Fannie Mae identifies judicial foreclosure as the preferred method in many states for loans it backs. For example, states like Connecticut, Florida, Hawaii, Illinois, New Jersey, and New York (including New York City) primarily use judicial foreclosure according to Fannie Mae's guidelines.

If a Other Loan Participants and Key Third Parties in the Mortgage Ecosystem wishes to use a different foreclosure methodology than Fannie Mae's preferred method, they generally must obtain approval from Fannie Mae's Regional Counsel by submitting a Non-Routine Litigation Form (Form 20) prior to initiating foreclosure. An exception exists in Oregon, where due to specific judicial decisions, servicers may proceed with a judicial foreclosure even if non-judicial is the preferred method, without further Fannie Mae approval, depending on the facts and circumstances of the case.

Foreclosure Sale Marketing and Auction Services

For properties securing first lien Conventional Loans, servicers must use Fannie Mae-approved vendors (Auction.com and Hubzu (an Altisource Company)) for foreclosure sale marketing services in applicable jurisdictions. This requirement is mandatory to ensure consistent and effective marketing of foreclosed properties. These services encompass all activities related to advertising and promoting a scheduled foreclosure sale, including online advertisements, print media, and direct mail campaigns.

Servicers are required to provide specific loan and property information to these vendors when placing an order for marketing services, including:

• Servicer loan number
• Fannie Mae loan number
• Property Address and State
• Borrower Name
• File referred to foreclosure date
• Foreclosure sale scheduled date
• Bid received date
• Foreclosure sale modified date (if applicable)
• Insurer, Investor, Investor Code, Client investor name
• Attorney Name
• Lien Position
• Loan Type
• Current Loan Amount
• Total debt amount based on foreclosure
• Hold Description (e.g., litigation, bankruptcy, reinstatement)

Exception: These requirements do not apply to Strict Foreclosure actions in Connecticut.

The use of an approved vendor for the actual conducting of foreclosure auction services is optional. The decision to use a vendor like Auction.com for these services is at the discretion of the servicer law firm retained by the servicer.