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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 law.
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