California foreclosure process

The California foreclosure process consists of a series of events leading up to the final auction and sale of the foreclosed property. In rare cases where there is no power of sale clause in the mortgage or deed of trust, judicial procedure may be followed with the courts becoming involved, but most cases are handled under non-judicial guidelines.

The notice of default is the first step in the foreclosure process, and this begins a 90 day period known as the redemption period, and begins with the notice of default being recorded in the appropriate county. Within ten days, a copy must be sent to borrowers, and within thirty delays the copy should be sent to all junior lien holders. A current report is also obtained from the title company, and during the next sixty days the buyer can cure the default.
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After the ninety days have expired, the notice of trustee sale must be prepared and published at least twenty days prior to the date of sale. Fourteen days before the sale, the notice of trustee sale must also be recorded in the county where the property is located.

California law requires that a trustee sale be carried out in strict accordance to the guidelines stated in the notices filed with the county. Only after all publication requirements have been met may the sale take place, and it must be held on the date specified in the notice of sale.. If a delay is required, a representative must appear at the location of the sale on the date specified and formally announce a delay. Debtors still have the opportunity and the right to reinstate their loan by bringing it current or making satisfactory arrangements with their lender up to five days before the sale.

This type of trustee sale can only be scheduled between 9:00 and 5:00 Monday through Friday on a regular business day.. The home will be auctioned to the highest bidder, who may be required to show proof of funds. It is illegal to pay off potential buyers to prevent them from bidding, or  to otherwise fix the sale. If no-one bids on the property, ownership reverts to the debt.

No lender may seek a deficiency judgment if the foreclosure is non-judicial. If the lender has and takes the option of a judicial foreclosure, they then have the right to obtain both a foreclosure sale order and a judgment against the borrower for a deficiency after the sale (which is court ordered in judicial cases). The deficiency judgment may only total the difference between the sale price of the home and the fair value of the security.

The earlier you can start trying to work out your problems with your lender the better. In some cases, lenders may balk until they see you are truly unable to meet your obligations. If at first you are told you do not qualify for assistance in revamping your mortgage, consult an attorney and keep in close communication with your lender. You don't want the California foreclosure process from taking your home away from you.

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