The Foreclosure Process In The State of California
The foreclosure process varies from state-to-state. Buckey & Schurter limits its practice to the state of California and therefore provides information only pertaining to California. If your property is located in a state other than California then you should seek advice from an attorney or other expert located in that state.
Judicial and Non-Judicial Foreclosure
Lenders have the option of proceeding by way of either a judicial foreclosure which is the initiation of a lawsuit and obtaining a court ordered foreclosure or with a non-judicial foreclosure which is provided for in a power of sale clause in a deed of trust. A judicial foreclosure has higher initial costs to a lender, but allows a lender to seek a deficiency judgment if your home is auctioned off for less money than is owed. However, most lenders choose to proceed by way of a non-judicial foreclosure.
Non-Judicial Foreclosure Guidelines and Timetable
The deed of trust must contain a "power of sale" clause granting
the trustee the right to sell the property in case of default by the
borrower. If the power of sale clause specifies the
time, place, and terms of the sale, then those procedures must be
followed. Otherwise, the requirements under California statues
pertaining to non-judicial foreclosures must be adhered to as
follows:
- First, a Notice of Default must be filed in the county where the property is located and the Notice must be mailed to the borrower.
- No sooner than 90 days after the Notice of Default is filed, a Notice of Sale must be mailed to the borrower and posted on the property itself at least 20 days before the date of the sale. The Notice of Sale muse be recorded in the county at least 14 days before the sale.
- The Notice of Sale must contain the time and place of the sale, the property address, and the trustee's name, address and phone number, as well as a statement that the property will be sold at auction.
- The borrower has up until 5 days before the date of the sale to stop the sale by curing the default by paying all past due amounts and the lender's costs of foreclosure.
- The property is sold to the highest bidder at the auction, which in many cases is the lender.
- After the sale in a non-judicial foreclosure, an original purchase money lender may not seek a deficiency judgment.
In summary, the non-judicial foreclosure process takes a minimum of 120 days.