Foreclosure Law - Quick Facts
is the type of foreclosure process that is mostly practiced in
California. It is simpler and faster and is preferred by
lenders because it bypasses the court system. Non-judicial foreclosure
is used when there is a power of sale clause in the deed of trust or
mortgage. This is a clause that gives the lender
pre-authorization to sell the property in the event of a default to pay
off the loan. The foreclosure
is expedited by a trustee hired by the beneficiary or lender as their
Judicial foreclosure is also practiced in California although it
is not widely used. It is more time-consuming and more
expensive for the lender because they have to file a lawsuit to obtain
a court order to foreclose.
Deed of Trust and/or Mortgage
Your lender files a Notice of Default to start the foreclosure.
You have 90
to reinstate your loan and bring it current by paying all your missed
payments including late fees and penalties. If you fail to do
your lender files a Notice of Trustee Sale with an auction sale
scheduled 21 days
after the Notice of Trustee Sale was filed. So you have a total of
about 111 days
until the property is sold at auction.
foreclosure law, California borrowers may have up to 1 year to redeem
or purchase back their property. However, if your property is sold at a trustee
sale/auction under a non-judicial foreclosure with a power of sale, you
have no rights to redeem
or purchase back your property.
California Foreclosure Law may or may not allow deficiency judgments.
Judgments Not Allowed - If the foreclosing lender is the
original lender at the time of purchase, AND the loan is in first lien
position, AND the property is your primary residence, the lender is NOT
ALLOWED to sue for a deficiency judgment.
Lenders are also not allowed to seek
deficiency judgment if your property is sold at the trustee sale/auction if
non-judicial foreclosure is the process used by your
Judgments Allowed - If the loan being foreclosed
on is a junior lien
position (ex: 2nd mortgage, home equity line of credit), the lender may
be ALLOWED to sue you and
collect a deficiency judgment. A lender may also be allowed
to collect a deficiency judgment if a
judicial foreclosure is the process used.
For additional information on California and Federal Tax laws
regarding mortgage debt relief and deficiency judgments, please go to:
Power of Sale
there is a power of sale clause within the mortgage or deed of trust,
and time, place and terms of sale are detailed in the clause, then the
power of sale procedure has to be followed. If there is no
of sale clause, then the foreclosure procedures are as follows:
- According to California Foreclosure
Trustee Sale Notice of Notice of Sale must be recorded at least 14 days
before the scheduled sale date in the county where the property is
- The notice must be mailed at least 20
days before the trustee sale via certified mail to the borrower with
- The notice must also be posted on the
property at least 20 days before the trustee sale date.
- The notice must be published or posted
in a public place in the county where the property is to be sold at
- California Foreclosure Law states that
will have up until 5 days before the trustee sale/auction to reinstate
the loan (cure the default) and the whole foreclosure process will be
you cannot cure the default, the sale will be held during any business
day between 9 am to 5 pm at the location stated on the trustee sale
trustee will ask for proof of funds to qualify the bidders to bid for
the full amount with cash or cash equivalent. Highest bidder
Please note that changes in California Foreclosure law occur from time
to time, so we highly recommend you consult with a foreclosure
for advise on your particular situation. Please see disclaimer.
How Does Foreclosure
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