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California Foreclosure Law
Foreclosures in California are primarily administered out of
court, although court foreclosures are allowed. Out-of-court
foreclosures take about four months.
Pre-foreclosure Period
Court foreclosures only occur if a lender desires a
deficiency judgment. This process gives a borrower up to one
year to redeem the property after the foreclosure sale. In
almost all cases, foreclosures are handled out of court. The
process begins when a lender file a notice of default with the
county recorder identifying the default amount and the date the
borrower must pay off the default. The notice is mailed to the
borrower and other affected parties. Up to five business days
before the trustee sale, the borrower may pay off the default
plus any applicable costs of foreclosure and stop the
foreclosure process. Three months after the notice of default is
filed, the lender can schedule a trustee's sale of the property.
Notice of Sale / Auction
At least 20 days before the trustee's sale, the notice of
sale must be posted on the property and in one local public
location. The notice is also published once a week for three
weeks in a local newspaper, starting at least 20 days before the
sale date. The notice is mailed to the borrower at least 20 days
before the sale and to anyone who requests the notice. The
notice must contain the date, time, and location of the sale,
the property address, and the trustee's contact information. In
addition, the notice of sale must be recorded with the county
recorder at least 14 days before the sale. The trustee's sale is
a public auction and the property is sold to the winning bidder.
The trustee may require bidders to pay the full bid amount in
cash or cashier's check. Anyone may bid at the sale, including
the lender and any junior lien holders. A trustee's sale may be
postponed by announcement at the sale. If a sale is postponed
more than three times, a new notice of sale must be issued.
After the sale is complete, the trustee transfers ownership to
the winning bidder. The borrower does not have the right to
redeem the property after the sale.
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