Below you will find the main steps of a nonjudicial foreclosure. Nonjudicial foreclosures are the majority of foreclosures in California.
Nonjudicial Foreclosure Process
Foreclosure Avoidance Assessment
1. Foreclosure Avoidance Assessment – The lender will, and must, contact everyone listed on the mortgage loan in order to assess the financial situation and explore any potential options to avoid foreclosure.
Additionally, the lender:
– Is not allowed to start the foreclosure process until at least 30 days after contacting those listed on the mortgage to make this assessment
– Must advise you during the first contact that you have the right to request another meeting regarding how to avoid foreclosure. This meeting must be scheduled to take place within 14 days of that first contact
You can authorize a lawyer, HUD-certified housing counseling agency, or other advisors to speak with the lender on your behalf about ways to avoid foreclosure. And you cannot be forced to accept any plan that is reached during that discussion.
Notice of Default
2. If a plan to avoid foreclosure is not found, the lender can record a Notice of Default. This must be recorded in the county where your home is located and be issued at least 30 days after contacting you for the foreclosure avoidance assessment. This Notice of Default marks the beginning of the formal and public foreclosure process. The lender must send you a copy of this notice via certified mail within 10 business days of it being recorded. You then have 90 days from the date that the Notice of Default is recorded to fix the default, usually by paying what is owed.
Note: Before the foreclosure process begins, the lender may send you letters that are NOT notices of default, but demand payment.
Notice of Sale
3. If you do not pay what is owed, a Notice of Sale is recorded, stating that the trustee will sell your home at auction in 21 days. This takes place at least 90 days after the Notice of Default is recorded.
The Notice of Sale must:
– Be sent to you by certified mail.
– Be published weekly in a generally circulated newspaper in the county where your home is located for 3 consecutive weeks leading up to the sale date.
– Be posted on your property, as well as in a public place.
– List the date, time, and location of the foreclosure sale, as well as the property address; the trustee’s name, address, and phone number; and a statement the property will be sold at a public auction.
Property Sold at Public Auction
4. The property can be sold at public auction at least 21days after the date when the Notice of Sale is recorded. A successful bidder is required to pay the full amount, either with cash or a cashier’s check. The successful bidder then receives a trustee’s deed. The lender usually bids at the auction, in the amount of the balance plus the foreclosure costs. If no one else bids, the home goes to the lender.
Source: California Courts, Foreclosure, 2014