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.
