Lenders can use a nonjudicial foreclosure, meaning the process occurs outside the court. When there's a power-of-sale clause in the deed of trust, the mortgage loan is secured, because the trustee can sell the home to pay off the loan balance. The lender can request such action if the borrower defaults on their loan, although they cannot collect a deficiency judgment at this point. A judicial foreclosure, on the other hand, involves a lawsuit in which a court orders the property to be sold and auctioned off. It's an option used when the mortgage or deed of trust has no power-of-sale clause.