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California
Foreclosure Process
In California, lenders may foreclose on deeds of trust or mortgages in
default using either a judicial or non-judicial
foreclosure process. The differences between the two
are outlined below:
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. This type of
foreclosure is rarely used in California
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 the property to pay off
the balance on a loan in the event of a 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 bidder’s
ability to pay the 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.
Summary
q
Judicial
Foreclosure Available: Yes
q
Non-Judicial
Foreclosure Available: Yes
q
Primary Security
Instruments: Deed of Trust, Mortgage
q
Timeline: Typically
120 days
q
Right of
Redemption: Varies
q
Deficiency Judgments
Allowed: Varies |
