nonjudicial foreclosure - in states that recognize the securitization of a loan on real property by a trust deed rather than a mortgage, in the event of a fatal default (i.e., a default that calls for the forfeiture of the property), the property will be sold by the trustee named in the deed of trust for the benefit of the beneficiary (lender). All of this takes place without intervention of a court, but under the "power of sale" provision of the deed of trust executed by the trustor (borrower). This provides for an orderly process wherein the trustee follows a prescribed set of notice and procedural steps to regain possession of the property from the trustor without having to adjudicate the matter. In some states with antideficiency laws, a lender who chooses a nonjudicial foreclosure is limited to the recovery of the property and may not pursue the borrower for any shortfall in proceeds. See also antideficiency laws, beneficiary, deed of trust, judicial foreclosure, nonrecourse loan, power of sale, trustee, and trustor.

© 2004 Bella Vista Publishing Company, Inc.  ISBN 0-9718225-0-6

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