FORECLOSURE

foreclosure (for-kloh-zh<<schwa>>r). A legal proceeding to terminate a mortgagor’s interest

in property, instituted by the lender (the mortgagee) either to gain title or to force a sale in order to

satisfy the unpaid debt secured by the property. Cf. REPOSSESSION. [Cases: Mortgages

380.C.J.S. Mortgages §§ 490–491, 495, 690–691, 695, 697.]

equitable foreclosure.A foreclosure method in which the court orders the property sold, and

the proceeds are applied first to pay the costs of the suit and sale and then to the mortgage debt. •

Any surplus is paid to the mortgagor. [Cases: Mortgages 386. C.J.S. Mortgages § 693.]

judicial foreclosure.A costly and time-consuming foreclosure method by which the

mortgaged property is sold through a court proceeding requiring many standard legal steps such as

the filing of a complaint, service of process, notice, and a hearing. • Judicial foreclosure is

available in all jurisdictions and is the exclusive or most common method of foreclosure in at least

20 states. [Cases: Mortgages 380. C.J.S. Mortgages §§ 490–491, 495, 690–691, 695, 697.]

mortgage foreclosure.A foreclosure of the mortgaged property upon the mortgagor’s default.

[Cases: Mortgages 380, 394. C.J.S. Mortgages §§ 490–491, 495, 504, 521, 690–691, 695, 697.]

nonjudicial foreclosure. 1. See power-of-sale foreclosure. 2. A foreclosure method that does

not require court involvement. [Cases: Mortgages 329. C.J.S. Mortgages §§ 490–491, 495, 575,

621.]

power-of-sale foreclosure.A foreclosure process by which, according to the mortgage

instrument and a state statute, the mortgaged property is sold at a nonjudicial public sale by a

public official, the mortgagee, or a trustee, without the stringent notice requirements, procedural

burdens, or delays of a judicial foreclosure. • Power-of-sale foreclosure is authorized and used in

more than half the states. — Also termed nonjudicial foreclosure; statutory foreclosure. [Cases:

Mortgages 329. C.J.S. Mortgages §§ 490–491, 495, 575, 621.]

strict foreclosure.A rare procedure that gives the mortgagee title to the mortgaged property —

without first conducting a sale — after a defaulting mortgagor fails to pay the mortgage debt

within a court-specified period. • The use of strict foreclosure is limited to special situations

except in those few states that permit this remedy generally. [Cases: Mortgages 384. C.J.S.

Mortgages § 694.]

tax foreclosure.A public authority’s seizure and sale of property for nonpayment of taxes.

[Cases: Taxation 635. C.J.S. Taxation § 1133.][Blacks Law 8th]