When a lender uses court action to sell a property in order to pay a mortgage in default

If a deed of trust or mortgage doesn't have a power of sale clause, the lender needs to take you to court in order to foreclose on your property. Judicial foreclosure varies from state to state, but in general, after the court declares a foreclosure, your home will be auctioned off to the highest bidder. You can still save your home by paying off your past due payments, as well as other costs that the lender incurred, before the court gives the lender approval to foreclose.

See: Foreclosure Property Calculator
Compare: Judicial foreclosure, Trustee's sale