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What is 'foreclosure by judicial sale?'

The judicial sale is one of the last steps in the foreclosure process. This is the sheriff's sale, the public auction at which the lender sells the home to the highest bidder. The last step in foreclosure is eviction.

The sheriff's sale is not always a judicial sale. Foreclosure laws vary from state to state, but there are two basic processes: judicial and non-judicial. According to RealtyTrac, an online real estate market research company, nine states use the judicial process exclusively; five states and the District of Columbia use only the non-judicial process; and 37 states use both. Illinois is a judicial state.

A judicial foreclosure is a court case. When a homeowner falls seriously behind on his mortgage -- generally three or four payments behind -- the lender will send a notice of intent to foreclose. However, the foreclosure does not begin officially until the lender has obtained a court order.

The lender, through the sheriff or a process server, then serves a summons on the homeowner. This is when the clock truly starts to tick. From that moment, the homeowner has 30 days to reply to the summons and 90 days to pay the amount past due to the lender and, so, reinstate the loan. If the lender hears nothing after 60 days, the lender may request a default judgment be entered against the homeowner.

The sale does not take place yet, though. The homeowner has a few more months before the redemption period expires. Where reinstatement involves the mortgage payments in arrears, redemption involves the entire loan. The homeowner may pay off the mortgage loan by selling the house or refinancing within seven months of receiving the summons or within three months of the default judgment.

It is the end of the redemption period that triggers the judicial sale. If the property sells, the lender must notify the now former homeowner within 15 days. That notice starts the clock running on eviction: If the former homeowner has not moved within 30 days, the lender may ask the sheriff to evict.

Source: Neighborhood Housing Services of Chicago, "Foreclosure Timeline," accessed July 21, 2015

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