The two roads
Judicial foreclosure goes through a court. The lender files a lawsuit, you are served with a summons and complaint, a judge rules, and the sale only happens with the court’s approval.
Non-judicial foreclosure skips the lawsuit. Your deed of trust or mortgage contains a power of sale, so a trustee or the lender can hold the auction after sending the notices your state requires. In many out-of-court states no judge reviews the sale unless someone files a court case.
What each one changes for you
Time. Out-of-court foreclosures are often faster, and court foreclosures often slower, but not always. State rules, local courts and your own choices can flip it. The calculator on your state page works it out from your dates.
Your first move. In a court state, the deadline that matters most is the one on the summons: file an answer on time. In an out-of-court state, there may be no summons at all, so the first deadlines are in the notice of default and the notice of sale.
Stopping a sale. In a court state you can raise defenses in the case. In an out-of-court state you usually have to start a court case yourself to stop a sale, and the deadlines before the sale are short. A legal aid office can tell you what is possible in your state.
After the sale. Many court states have the judge confirm the sale before it is final, and some give a redemption period. Many out-of-court states do not. Your state page says which.
Many states allow both
Some states let the lender choose between a lawsuit and a power of sale, and a few use a hybrid. That is why the lists above have a third group. If you are not sure which road your loan is on, the first official paper you receive tells you: a summons means a court case, and a notice of default or notice of sale means the out-of-court road.
The federal rules are the same on both roads
Servicers generally may not make the first foreclosure notice or filing until you are more than 120 days behind, and a complete loss mitigation application sent more than 37 days before a sale can stop that sale from going ahead until it is decided. 12 CFR 1024.41. These protections apply to a home you live in as your main residence, and small servicers are exempt from some of them. Use that time to apply for help, whichever road you are on.