There are 2 types of foreclosure in California
1. Non judicial foreclosure
A non-judicial foreclosure does not require the filing of a lawsuit and is most typically used by lenders.
2. Judicial foreclosure
– May be completed in as little as 111 days.
The following are the steps in a non-judicial foreclosure
1. Notice of Default is filed with the County Recorder’s office.
This typically happens after 3 to 4 months of non-payment of the mortgage, but it can be more or less.
2. 90 days after the Notice of Default is filed, a Notice of Trustee Sale can be filed.
A Notice of Trustee Sale must give 21 days of notice before the sale date.
3. Trustee Sale – Auction
– This is when the property is actually sold by the lender. It is sometimes known as being sold on the courthouse steps.
– After the auction, the property is transferred to the highest bidder. If no bid is higher than the beneficiary/lender’s, the property is transferred back to the lender.
– When this happens, the property is now referred to as an REO (real estate owned)
– Auction may be postponed up to 365 days by the lender.
Lenders may not seek a deficiency judgment after doing a non-judicial foreclosure.
The borrower has no right of redemption after a non-judicial foreclosure.