Foreclosure Process in California

Know stages of non-judicial foreclosure for better timing of your actions to avoid foreclosure

How does foreclosure process work?

Foreclosure procedures in California are governed by California Civil Code Section 2920.

Here's a summary of foreclosure process after the homeowner (trustor) defaults on home mortgage loan:

• Your lender records a Notice of Default (NOD) and sends a notice to you
• You have three months to reinstate your loan and pay all delinquent amounts
• Your property is scheduled for trustee sale in four weeks by publishing Notice of Trustee's Sale in a newspaper in your county for three consecutive weeks.
• Notice of Trustee's Sale is mailed to you at least 20 days before the sale.
• Notice of Trustee's Sale is recorded at your county's recorder's office.
• If you do not act to delay foreclosure or stop the sale, then you lose your rights on the property.
• Public auction is conducted between 9:00 a.m. and 5:00 p.m. in a public place. Highest bidder receives the trustee's deed if bid is adequate.
• New owner may obtain a loan or pay cash to own the property.
• New owner (highest bidder) pays the first trust deed from the proceeds based on "due on sale" clause included in most loan documents. Then, remaining funds, if any, are paid to others (junior lien holders) after paying all expenses related to defaulted debt.

When can you cure your default in paying mortgage installments?

You can stop foreclosure during three-month reinstatement period and until five days before the sale. You are expected to pay all delinquent mortgage installments, accumulated interest, late charges, and expenses incurred by your bank or lender (trustee).

What happens if you cure the default?

Curing the default is also called redemption. When this happens, a Notice of Rescission of Declaration of Default and Demand for Sale and of Notice of Breach and Election to Cause Sale (referred as Notice of Rescission) is issued. Your lender must record this notice.

See some foreclosure definitions in foreclosure terminology as some terms are used interchangeably.

Need help? Review your options to get foreclosure help by professionals (lawyers specializing in foreclosure, foreclosure consultants registered to assist homeowners subject to foreclosure, debt counselors, and real estate agents in California), California state agencies, county agencies in California, consumer advocacy groups, and nonprofit organizations in California.