Judicial foreclosure is a legal process in which a defaulted debtor’s property is sold under the supervision and ratification of a court, often resulting in a deficiency judgment against the debtor if the sale price does not cover the owed amount.
States whose laws give a lien on property to secure debt. This is contrasted with title-theory states where the lender holds the title. In lien-theory states, borrowers have the right to use and enjoy the property unless they default, at which point lenders may foreclose.
A 'Mortgagee in Possession' situation arises when a lender takes possession and control of a mortgaged property following the foreclosure of a loan secured by the mortgage. The lender holds the property, collecting any income produced, until it is sold at the foreclosure sale.
