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CDA Law Center
– Judicial Foreclosure Available: Yes
– Non-Judicial Foreclosure Available: Yes
– Primary Security Instruments: Deed of Trust, Mortgage
– Timeline: Typically 120 days
– Right of Redemption: Varies
– Deficiency Judgments Allowed: Varies
In California, lenders may foreclose on deeds of trusts or mortgages in default using either a judicial or non-judicial foreclosure process.
The judicial process of foreclosure, which involves filing a lawsuit to obtain a court order to foreclose, is used when no power of sale is present in the mortgage or deed of trust. Generally, after the court declares a foreclosure, your home will be auctioned off to the highest bidder.
Using this type of foreclosure process, lenders may seek a deficiency judgment and under certain circumstances, the borrower may have up to one (1) year to redeem the property.
The non-judicial process of foreclosure is used when a power of sale clause exists in a mortgage or deed of trust. A “power of sale” clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of the their default. In deeds of trust or mortgages where a power of sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power of Sale Foreclosure Guidelines”.
Power of Sale Foreclosure Guidelines
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A notice of sale must be: 1) recorded in the county where the property is located at least fourteen (14) days prior to the sale; 2) mailed by certified, return receipt requested, to the borrower at least twenty (20) days before the sale; 3) posted on the property itself at least twenty (20) days before the sale; and 4) posted in one (1) public place in the county where the property is to be sold.
The notice of sale must contain the time and location of the foreclosure sale, as well as the property address, the trustee’s name, address and phone number and a statement that the property will be sold at auction.
The borrower has up until five days before the foreclosure sale to cure the default and stop the process.
The sale may be held on any business day between the hours of 9:00 am and 5:00 pm and must take place at the location specified in the notice of sale. The trustee may require proof of the bidders ability to pay their full bid amount. Anyone may bid at the sale, which must be made at public auction to the highest bidder. If necessary, the sale may be postponed by announcement at the time and location of the original foreclosure sale.
Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale and the borrower has no rights of redemption.
|Judicial||Non-Judicial||Process Period||Sale Publication||Redemption Period||Sale/NTS|
|Yes||Yes||117 Days||21 Days||365* Days||Trustee|
|Judicial Foreclosures are not common|
Court foreclosures only occur if a lender desires a deficiency judgment. This process gives a borrower up to one year to redeem the property after the foreclosure sale. It is recommended that the borrower find a way to resolve it, or get someforeclosure assistance.
In almost all cases, foreclosures are handled out of court. The process begins when a lender files a notice of default with the county recorder identifying the default amount and the date the borrower must pay off the default. The notice is mailed to the borrower and other affected parties.
Up to five business days before the trustee sale, the borrower may pay off the default plus any applicable costs of foreclosure and stop foreclosure. Three months after the notice of default is filed, the lender can schedule a trustee’s sale of the property.
Notice Of Sale / Auction
At least 20 days before the trustee’s sale, the notice of sale must be posted on the property and in one local public location. The notice is also published once a week for three weeks in a local newspaper, starting at least 20 days before the sale date. The notice is mailed to the borrower at least 20 days before the sale and to anyone who requests the notice. The notice must contain the date, time, and location of the sale, the property address, and the trustee’s contact information. In addition, the notice of sale must be recorded with the county recorder at least 14 days before the sale.
The trustee’s sale is a public auction and the property is sold to the winning bidder. The trustee may require bidders to pay the full bid amount in cash or cashier’s check. Anyone may bid at the sale, including the lender and any junior lien holders. A trustee’s sale may be postponed by announcement at the sale. If a sale is postponed more than three times, a new notice of sale must be issued.
After the sale is complete, the trustee transfers ownership to the winning bidder. The borrower does not have the right to redeem the property after the sale.
Kamala D. Harris
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State Auditor, Elaine M. Howle, CPA
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Fannie Mae Loan Look-Up Tool – Find out if your loan is owned by Fannie Mae here.
Homeowner Crisis Resource Center – Includes tips on avoiding foreclosure.
MyMoney.gov – This site organizes financial education help from over 20 different Federal web sites in one place, including dealing with mortgages.
Service Members Civil Relief Act – The Act that postpones or suspends certain civil obligations to enable service members to devote their full attention to duty and to relieve stress on their families. The act covers:
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• Mortgage payments
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