Harvey Yamanaka
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California Foreclosure Law

  • Judicial Foreclosure Available: Yes
  • Non-Judicial Foreclosure Available: Yes (this is the most common)
  • Primary Security Instruments: Deed of Trust, Mortgage
  • Timeline: Typically 120 days or less
  • Right of Redemption: Yes, judicial foreclosure only
  • Deficiency Judgments Allowed: Yes, judicial foreclosure only

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 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.

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 14 days prior to the sale
  2. Mailed by certified, return receipt requested, to the borrower at least 20 days before the sale
  3. Posted on the property itself at least 20 days before the sale
  4. Posted in 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.

 

The following chart shows a comparison of the processes of Mortgage Judicial Foreclosure and Trust Deed Non-Judicial Foreclosure.

Mortgage Judicial Foreclosure

Trust Deed Non-Judicial Foreclosure

Borrower Defaults

File Complaint (Initiate Law Suit)

 

Beneficiary authorizes Trustee to proceed with Foreclosure

Record Lis Pendens

Record Notice of Default

Court Hearing Date set for Sale

 

Period of Equitable Redemption Trustor can reinstate

Advertise the Sale

Sell to highest bidder Buyer pays cash at sale.

Buyer receives Certificate of Sale

Trustee conveys Trustee's Deed to Buyer

Period of Statutory Redemption (Right of Redemption)

Deficiency Judgment Unlikely

 

 

Sheriff's Deed Conveyed to Buyer Evict Mortgagor

 

 

Possible Deficiency Judgment

 

 

Links of Interest on Ca laws:

  • Code Section 2924 - Trustee's Sale Procedure
    Regulates the Trustee and it's procedures when handling a foreclosure.

 

Information deemed reliable but not guaranteed to be accurate.
 

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