California Foreclosure Laws

Most California foreclosures are non-judicial or out-of-court, although judicial foreclosures are permitted in the state. Most non-judicial foreclosures take approximately four months to complete. Usually, court foreclosures are only used when a deficiency judgment is sought by the lender. In the event of a judicial foreclosure, there is a redemption period of one year. There is no such period with an out-of-court foreclosure.

Pre-Foreclosure

For the typical non-judicial foreclosures in California, the foreclosure process starts when a notice of default is filed by the lender with the county recorder. This notice describes how much is in default and gives a deadline by which the debtor must pay off the amount. The notice is mailed to all parties affected by the potential foreclosure - including the debtor. Three months after the notice has been filed, the property can be sold to repay the debt. The debtor has until five business days before the foreclosure sale to stop the foreclosure by paying off all the monies owed.

Notice of Auction

The notice of auction, or notice of sale, must be posted before a foreclosure sale can take place. This notice of sale must contain the property address, the time and location of the auction, and the contact information for the trustee. The notice must be posted in one public location locally and on the property itself at least 20 days before the auction date. In addition, the notice must be published for three consecutive weeks in a local newspaper. This publication must begin at least twenty days before the auction date. The debtor must be mailed a copy of the notice and anyone who asks for the notice must also be mailed a copy. At least fourteen days before the auction, the notice of sale must be filed with the county recorder as well. If the sale is postponed for any reason, this must be announced. If a sale is postponed three times, the notice of auction process must begin again with a new notice filed.

Foreclosure Auction

The foreclosure auction or trustee sale in California is open to the public and is open to junior lien holders as well as the lender. The winning bidder receives ownership of the property after paying the bid amount. Some trustees may ask that bidders pay at once with a cashier's check or cash in order to take ownership of the property. In a non-judicial foreclosure, there is no period of redemption.