What type of foreclosure allows a property to be sold under court order after notifying the defaulting borrower?

The correct answer is judicial foreclosure, which is a legal process in which a lender must take action through the courts to reclaim property following a borrower's default on a mortgage. In this type of foreclosure, the lender files a lawsuit against the borrower, and the court issues an order for the sale of the property. This process requires the lender to notify the defaulting borrower and follow specific legal procedures, which ensures that the borrower's rights are considered and provides a clear path to resolving the default.

Judicial foreclosure is important because it provides a legal framework that protects both parties involved. The court oversees the process, which helps to ensure fairness and compliance with the law. This differs significantly from non-judicial foreclosure, which does not require court involvement and typically allows for a quicker sale process. Being aware of these distinctions is crucial for both real estate professionals and borrowers, as the method of foreclosure can impact the rights and remedies available to the parties involved.