finance
nonjudicial foreclosure
A foreclosure process carried out without court involvement, made possible by a power of sale clause in a deed of trust or mortgage. After the borrower defaults and required notices are given and waiting periods pass, the trustee or lender sells the property at public auction. It is usually faster and cheaper than judicial foreclosure. Availability and procedures vary by state.
- Exam tip
- Nonjudicial foreclosure relies on a power of sale clause and is usually associated with deeds of trust. Judicial foreclosure goes through the courts.
- Example
- After a borrower misses several payments and receives a notice of default, the trustee holds an auction on the courthouse steps without a lawsuit.
Related terms & state variants
Sources
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Last verified: 2026-10-23