A judicial sale is
one type of remedy available to a mortgagee
when a mortgage is in default. The mortgagee
can sue for a judicial sale, payment and
possession, as opposed to more frequent
option of
foreclosure.
In judicial sale the
mortgagee looks to the court to sell the
property with the proceeds being applied
against the mortgage debt. Any deficiencies
should be pursued under the mortgagor's
personal covenant. If any excess funds arose
from the judicial sale, the money would be
returned to the mortgagor.
The judicial sale is
not a popular option, as the court would
usually dispose the property by an auction,
which can result fewer dollars then the sale
of he property on the open market.
Further, the
mortgagor will receive any excess funds from
the auction proceeds, as suppose to
foreclosure where all excess funds are
credited to the mortgagee.
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