California
Foreclosure Law
Summary
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.
DISCLAIMER
