Find your state's foreclosure laws.

Foreclosure laws are set at the state level (although the Federal government is involved through loan guarantee programs). Every state has its own rules. There is a wide variation in some of the foreclosure rules. For instance, in Tennessee, borrowers are allowed up to two years, under certain circumstances, to redeem their home after foreclosure. In a number of other states, there is no right of redemption at all.

Of primary concern to many defaulting homeowners is whether their state is a recourse or non-recourse state. In a recourse state the lender in many cases can sue the homeowner for any deficiency (money still owed) after your home has been sold at auction.

Foreclosure statutes are changing all the time. Please consult a lawyer in your state to get current law and its interpretation.

Although state laws vary in their rules and their application, there are essentially two forms of foreclosure proceedings: judicial and non-judicial.

As explained in my homeowner foreclosure guide, a judicial sale is a lawsuit that is filed with the court and is subject to judicial approval. A non-judicial foreclosure is done through the power-of-sale clause in a deed of trust. A non-judicial foreclosure follow contractually agreed upon procedure.

A non-judicial sale is a sale that is contractual. When you give the lender a deed of trust, you contractually agree that in the event of default the trustee can sell your home. The method and terms of the sale are agreed to in advance. Unless, the trustee violates the terms of your contractual agreement, a court is usually not involved.

In the following pages are state-by-state summaries of foreclosure laws applicable to homeowners in that state.

Every state has specific notice requirements. The foreclosed homeowner must receive notice and, in most states, the sale must be adequately advertised in a county newspaper. The publication period is generally once a week for four weeks. Generally, a professional foreclosure company hired by the lender will follow the notice procedures precisely.

The state-by-state foreclosure pages addresses the following questions:

• Does my state allow non-judicial foreclosures? A non-judicial foreclosure is generally authorized by the Power of Sale clause in the deed of trust. A non-judicial foreclosure culminates with a trustee’s sale. The procedure is quicker than a judicial foreclosure. The differences between a judicial and non-judicial foreclosure are discussed elsewhere on this website.
• Does my state allow me the right of reinstatement? Can I catch up on my payments prior to sale and save my home?
• Is there a right of redemption? Can I buy my house from the purchaser at auction? There is usually a redemption right with a judicial foreclosure.
• Can the lender collect on any deficiency after the auction? If my house sells for less than I owe the lender am I stuck for the balance? If you state is a "recourse" state then the lender might be able to sue you for the deficiency.