Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
Foreclosure Laws In
California
Quick
Foreclosure Laws in California:
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
Foreclosure Laws in
California, lenders
may foreclose on deeds of trusts or mortgages in
default using either a judicial or non-judicial
foreclosure process.
Foreclosure Laws in
California:
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.
Foreclosure Laws in
California:
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".
Foreclosure Laws in
California:
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.
Foreclosure Laws in
California:
Allows
Lenders may not seek a deficiency judgment after
a non-judicial foreclosure sale and the borrower has
no rights of redemption.
