Foreclosure Timeline: California

Majority of the lenders in California use non-judicial foreclosure process which is also known as a trustee’s sale. Compared to the judicial foreclosure process, trustee’s sale is cheaper and quicker as it does not require a court proceeding.

Pre-Foreclosure Period

It is a time when borrower stops making mortgage repayment which forces lender to initiate foreclosure process. Typically, most of lenders wait for 2-3 months after first default by borrower before staring the foreclosure. Once sufficient time passes so that lender is certain that borrower has tuned into defaulter, foreclosure process is initiated.

The non-judicial foreclosure process in the State of California typically takes about five months to complete. The steps are:

Day 1: Lender contacts defaulting borrower

It is necessary for the lender who is initiating the foreclosure process to contact the defaulting borrower either by phone or in person. This can help to assess the financial position of borrower which might help to avoid foreclosure process by exploring other possible solutions. As a part of foreclosure process, lender needs to inform the borrower about the right to meet within 14 days. It is also necessary to provide toll-free number of HUD- certified housing counselors to the borrower.

Day 31: Notice of Default

The lender can file a notice of default 30 after contacting defaulting borrower so as to inform the borrower about default. It is necessary to file the notice of default in the county where mortgaged property is located. Copy of notice of default must be mailed within 10 business days to defaulting borrower as well as other people who have requested for notice.

Day 121: Notice of Trustee’s Sale

Once three month timeline of notice of default is over, lender can record a notice of trustee’s sale by deciding date, time, and place for non-judicial foreclosure process in the State of California. Also, it is necessary to record, post and mail the notice of trustee’s sale to the borrower. Moreover, lender must publish it once a week in a newspaper of general circulation for three consecutive weeks.

Day 145: Deadline to Cure Default

It is possible for borrower to restore the loan by paying the defaulted payments plus permissible costs for up to five business days before the trustee’s sale.  Even after the expiry of reinstatement period but before the bidding begins, the borrower can still redeem the property by settling entire debt, plus interest and other costs.

Day 152: Trustee’s Sale

Law in California allows non-judicial foreclosure 20 days after the posting of the notice of trustee’s sale. However, lenders normally wait for at least 31 days to help protect against federal tax liens. At a public auction, the property is awarded to the highest bidder and title is transferred by trustee’s deed to the successful bidder.