Question

Dylan has gotten behind on her mortgage payments. Her mortgage doesn't include a power-of-sale clause. If her lender pursues a foreclosure sale, which process will most likely be used?

A) Judicial Foreclosure
B) Non-Judicial Foreclosure
C) Short Sale
D) Deed in Lieu of Foreclosure

Answer 1

If a borrower falls behind on mortgage payments without a power-of-sale clause, the lender will likely pursue a judicial foreclosure process.

Step-by-step explanation:

When a borrower falls behind on mortgage payments and the mortgage does not contain a power-of-sale clause, the lender will most likely pursue a judicial foreclosure process.

In a judicial foreclosure, the lender initiates a lawsuit against the borrower in order to obtain a court-ordered sale of the property. This process requires the lender to go through the court system, providing notice to the borrower and giving them an opportunity to respond.

In contrast, a non-judicial foreclosure process does not involve court oversight and is typically used in mortgage agreements that include a power-of-sale clause.