California and many other states use deeds of trust to secure real property. The non-judicial foreclosure process is used when a deed of trust contains a power of sale. The power of sale enables the trustee, a third party chosen by the lender, to initiate the foreclosure process without having to go to court. The trustee will guide both the lender and the borrower through the foreclosure process, assuring that the appropriate legal and contractual requirements are satisfied.

If the property being foreclosed on is located in a state where mortgages rather than deeds of trust are utilized as security interests then the foreclosure must be "judicial". This simply means that the foreclosure process involves local courts rather than a third-party trustee. Each state has its own rules and regulations that must be carefully followed otherwise the courts may set aside the foreclosure process.

Sometimes, even if the property is secured by a deed of trust containing a power of sale, the lender may decide to proceed with a judicial foreclosure. The types of properties that generally fall into this category are income producing properties such as apartment complexes, hospitals, office buildings and agricultural lands.

It is possible to commence both judicial and non-judicial foreclosure processes on the same property for the same default. This allows the lender to have both options open and choose the solution that best suits his or her needs.