Foreclosure Summary
– 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.
California 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.
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 the loan in the event of their default.
Where Power Of Sale Exists
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.”
California – 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:
- Recorded in the county where the property is located at least fourteen (14) days before the sale.
- Mailed by certified return receipt requested to the borrower at least twenty (20) days before the sale.
- Posted on the property itself at least twenty (20) days before the sale.
- Published in one (1) public place in the county where the property is to be sold.
Notice Must Contain Specific Information
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.
Borrower’s Right To Cure Default
The borrower has 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 occur at the location specified in the notice of sale. The trustee may require proof of the bidder’s ability to pay their total bid amount.
Auction Open To General Public
Anyone may bid on the deal, which must be made at a 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.
Lender Can Not Seek Deficiency Judgment
Lenders may not seek a deficiency judgment after a non-judicial foreclosure sale, and the borrower has no redemption rights.
