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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 a 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 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 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 (5) 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 am and 5 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 the 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.
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