California Foreclosure Law

California lenders can foreclose on mortgages or deeds of trust using a judicial or non-judicial process. Foreclosures last an average of 120 days (four months).

Judicial foreclosure
In a judicial foreclosure, the lender files a lawsuit in order to get a court ruling allowing them to foreclose. This process is followed when the mortgage or deed of sale does not contain a Power of Sale clause, which would authorize the lender to sell the home in case the borrower defaults.

After the home is sold in a judicial foreclosure, the borrower is given a one-year Right of Redemption. This means he or she has one year to regain possession of his home by paying the purchase price plus interest.

Judicial foreclosures also allow the lender to file a deficiency suit. This is a personal claim made against the borrower if the foreclosure sale is not enough to pay off the debt, or if the sale price is less than the home’s fair market value.

Non-judicial foreclosure
A non-judicial foreclosure process is followed when there is a Power of Sale clause in the mortgage or deed of trust. If the clause sets the time, date, and place of sale, then these terms are followed during the foreclosure. If it does not specify the details, the foreclosure proceeds as follows:

First, the lender must file a Notice of Sale containing the scheduled time and date of the sale, the property address, the name and contact details of the trustee, and a statement saying the home will be auctioned off. This step consists of four parts:

1) The NOS is recorded in the county office where the home is located, at least 14 days before the sale date.
2) The lender sends a copy of the notice to the borrower by certified mail, with a return receipt included, at least 20 days before the sale date.
3) The notice is posted on the home at least 20 days before the sale date.
4) The notice is posted at any public place in the county where the sale date is scheduled.

The auction is held on a business day anytime from 9 am to 5 pm, at a public location specified in the NOS. Anyone can bid at the sale, although the trustee may require proof of financial capacity to make sure they can pay their bid amounts. The sale can also be postponed if necessary, provided the change is announced at the time and date originally specified.

The borrower can bring the account current and stop foreclosure up to five days before the sale date. However, non-judicial foreclosures do not give the borrower a Right of Redemption, and lenders cannot seek deficiency judgments.

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