What type of foreclosure occurs through the court system?

The correct answer is judicial foreclosure. In a judicial foreclosure, the lender must file a lawsuit in the court system to seek the foreclosure of the property due to the borrower's default on the mortgage. This process involves court proceedings and allows the borrower the opportunity to respond and contest the foreclosure, which is an essential aspect of judicial foreclosure.

This type of foreclosure is common in states that require a court's involvement for the foreclosure to proceed, providing a legal framework that ensures due process rights are upheld. The judicial process can also take longer than non-judicial foreclosure methods because it involves several legal steps, including filing a complaint, serving the borrower with notice, and potentially going to trial if the borrower contests the action. This contrasts with non-judicial foreclosure, where the lender can proceed without involving the court, which often leads to a quicker resolution.