California Foreclosure Laws

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California Foreclosure Laws

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CDA Law Center

Quick Facts

–  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.

Judicial Foreclosure

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.

Non-Judicial Foreclosure

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.

More information on California foreclosure laws.

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

Pre-foreclosure Period

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.

California Foreclosure Resources

California Department of Justice, Office of the Attorney General

Kamala D. Harris

Attorney General Consumer Alerts, Information and Complaints

  • You may find your answer in the most frequently asked questions or the listed consumer topics.
  • Online complaint referral tables, pdf. By taking this step, your complaint can get to the government agency that directly regulates the individuals or businesses about which you have a complaint.
  • Ways to resolve your complaint. Consider your options. Remember, you must pursue remedies in your private dispute on your own. The AG can’t provide you with legal advice or represent you in personal legal actions.

California Department of Consumer Affairs

CA Department of Consumer Affairs – File A Complaint

California Department of Finance

California Department of Financial Institutions

California Department of Insurance

CA Department of Insurance – Consumer Information

California Judicial Branch

California Legislature

California Office of the Governor

Governor Edmund G. Brown, Jr.

Office of the Governor, Frequently Asked Questions (FAQs)

California Secretary of State

California State Assembly

John A. Perez, Speaker of the Assembly

John Boehenr, Speaker of the House

California Bill Information

California Law Information – Code

California Legislative Calendar

California Legislation – Find A Bill

Find My CA Representative

California State Auditor

State Auditor, Elaine M. Howle, CPA

California State Senate

Find My Senator – By District

State of California Franchise Tax Board

State of California

STATE OF CALIFORNIA FORECLOSURE RESOURCES:

California Association of Realtors

California Department of Real Estate (DRE)

DRE Foreclosure Brochure

Filing a Complaint with the Department

California Department of Housing and Community Development

Complaint Information Sheet

State of California Consumer Home Mortgage Information

California Foreclosure Information

California Foreclosure Law Summary

California Foreclosure Prevention Act

California Foreclosure Process – Housing and Economic Rights Advocates

California Local Department of Housing & Urban Development (HUD) Offices

California Mortgage Assistance Corporation

Foreclosure Prevention Workshops – Freddie Mac

Neighborhood Housing Services of Los Angeles County

Neighborhood Housing Services of Orange County

Neighborhood Housing Services of Silicon Valley

Neighborhood Housing Services of the Inland Empire

State of California Franchise Tax Form – Mortgage Forgiveness and Debt Relief Law

REPORT FRAUD OR SCAMS IN CALIFORNIA:

CA Association of Realtors Foreclosure-Related Scam Info & Help

California Department of Financial Institutions – Online Complaint Form

California Office of Consumer Affairs – Complaint Self-Help for Consumers

Prevent Loan Scams – California

California Department of Justice, Office of the Attorney General – Consumer Complaint Form

AG’s Public Inquiry Unit, including comsumer complaint info: (800) 952-5225

U.S. Consumer Action Website

STATE OF CALIFORNIA ADDITIONAL RESOURCES:

Vote – Find Your Polling Place

STATE OF CALIFORNIA SHORT SALE RESOURCES:

Fannie Mae Short Sale Assistance Desk

California Association of Realtors Short Sale Information and Advisory

STATE OF CALIFORNIA COURTS & LAW LIBRARIES:

California Courts of Appeal

California Law Library

California Superior Courts

California Supreme Court

U.S. Bankruptcy Court – Central District of California

U.S. Bankruptcy Court – Eastern District of California

U.S. Bankruptcy Court – Northern District of California

U.S. Bankruptcy Court – Southern District of California

U.S. District Court – Central District of California

U.S. District Court – Eastern District of California

U.S. District Court – Northern District of California

U.S. District Court – Southern District of California

FEDERAL GOVERNMENT RESOURCES:

Fannie Mae Loan Look-Up Tool – Find out if your loan is owned by Fannie Mae here.

Financial Fraud Enforcement Task Force

Freddie Mac Loan Look-Up Tool – Find out if Freddie Mac owns your loan here.

Homeowner Crisis Resource Center – Includes tips on avoiding foreclosure.

Homeownership Preservation Foundation – Find Credit Counseling here and HERE.

Information on the OCC’s Independent Foreclosure Review

MyMoney.gov – This site organizes financial education help from over 20 different Federal web sites in one place, including dealing with mortgages.

OCC’s Tips for Avoiding Foreclosure Rescue Scams

Office of the Comptroller of the Currency – For Complaints Against National Banks

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:

•       Outstanding credit card debt

•       Mortgage payments

•       Pending trials

•       Taxes

•       Termination of lease

•       Eviction from housing

•       Life insurance protection

Get more information at Military.com or at HUD’s National Servicing Center,                                                                             and here is Information for Veterans from HUD.

U.S. Congressional Representative Look-up Tool

U.S. Department of Housing & Urban Development – Avoiding Foreclosures

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