Summary:
| Judicial Foreclosure |
Sometimes |
| Non-Judicial Foreclosure |
Yes, most common |
| Security Instruments |
Deed of Trust,
Mortgage |
| Time
Frame |
111 days or
more |
Judicial foreclosure-- in California is rarely used,
and only in the absence of a power of sale clause in the loan
document or when the lender is seeking a court order for a
deficiency judgment. The lender must sue the borrower to obtain
a decree of foreclosure and order of sale. The court may also
order that the borrower has up to one year to redeem the property.
Non-judicial foreclosure-- is the most common form of
foreclosure in California. This process is
used when there is a power of sale clause authorizing the
lender, in the event of default, to sell the property to satisfy
the loan balance. If the power of sale clause includes the
time, place and terms of sale, then that procedure must be
followed. If not, the process is as follows:
A
Notice of Default-- is recorded with the county in which the property is
located when a borrower fails to make a loan payment. A copy
of this Notice is sent by certified mail to the borrower within
10 business days of recording. The borrower has 90 days from
the date of recordation to cure the default.
If
the borrower fails to cure the default--, a Notice of Sale is recorded.
This Notice states that the lender or trustee will sell the
property at auction in 21 days. This Notice is also sent certified
mail to the borrower. It is also published weekly in a newspaper
of general circulation in the county for three consecutive
weeks prior to the sale date. The notice is also posted on
the property, as well as in a public place, usually at the
county courthouse.
The
Trustee Sale Auction-- is held as a public auction at the time and place designated
in the Notice of Sale, and conducted by the lender's representative.
The successful bidder must pay immediately with cash or cashier's
checks in the full amount of the bid. The successful bidder
receives a trustee's deed on completion of the sale. The lender
usually bids in the amount of the balance due plus costs.
If no one else bids, the property reverts to the lender.
Links:
- Code Section 2924 - Trustee's Sale Procedure
Law which regulates the Trustee and it's procedures
when handling a foreclosure.
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