California Foreclosure Laws
Attorney General's Office
1515 K Street, Suite 511
P.O. Box 944255
Sacramento, CA 94244-2550
Ph: (916) 445-9555
Civil law division: (916) 324-5431
Foreclosure Laws in California
Right of Redemption:
Judicial Only. 12 Months
Judicial Foreclosure Only
Notice of Default
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.
The most common form of California foreclosures. 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 mortgagee, trustee, must wait 30 days after contact is made with the
borrower, or 30 days after satisfying due diligence requirements to contact
the borrower, as specified, before filing a notice of default.
The mortgagee or authorized agent to advise the borrower that he or she
has the right to request a subsequent meeting within 14 days, and to provide
the borrower the toll-free telephone number made available by the United
States Department of Housing and Urban Development (HUD) to find a HUD-certified
housing counseling agency.
The notice of default to include a specified declaration from the mortgagee,
beneficiary, or authorized agent regarding its contact with the borrower
or that the borrower has surrendered the property. If a notice of default
had already been filed prior to the enactment of this act, the bill would
instead require the mortgagee, trustee, beneficiary, or authorized agent,
as part of the notice of sale, to include a specified declaration regarding
contact with the borrower. The bill would authorize a borrower to designate
a HUD-certified housing counseling agency, attorney, or other advisor to
discuss with the mortgagee, beneficiary, or authorized agent, on the borrower’s
behalf, options for the borrower to avoid foreclosure.
A legal owner to maintain vacant residential property purchased at a foreclosure
sale, or acquired by that owner through foreclosure under a mortgage or
deed of trust. The bill would authorize a governmental entity to impose
civil fines and penalties for failure to maintain that property of up to
$1,000 per day for a violation.
Notice of Default:
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:
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.
The borrower has no right of redemption, and deficiency judgments may
be pursued in non-judicial foreclosure.