Frequently Asked Questions About California Foreclosures
Q: How are foreclosures conducted in California?
A: The most popular method of in California is non-judicial foreclosure. This is not administrated by the court, but rather through contractual obligations. Deeds of trusts usually have a provision called a power of sale clause, which allows a trustee to sell a property if the borrower has defaulted on the property loan. The trustee, acting as a representative of the lender, may auction off the property. In California, unlike many other states, title companies generally serve as trustees.
It may be processed through judicial procedures if no power of sale language was included in the property’s loan documents.
Q: What is the “one-action rule?”
A: Under the one-action rule, a lender may not recover a deficiency judgment if the foreclosure has been completed by non-judicial means. He or she may recover a deficiency judgment if the foreclosure went through a judicial process, but only in certain circumstances.
Q: What is the power of sale notice requirements?
A: A notice of default is usually not recorded unless the loan in question has been in substantial default for a significant period of time (six months or more) referred to as the redemption period. After the notice is recorded, at least 60 days must pass before the process moves forward. Then a notice of sale can be recorded. It must contain the name and address of the trustee, certain disclosures that explain the circumstances of the sale, the name of the beneficiary, and other relevant information. It must be recorded in the county in which the property is located at least 14 days before the sale is conducted.
Notice of the sale must be both mailed to the affected borrower and posted at the property at least 20 days before the sale. If the borrower wishes to prevent the process from beginning, he or she has the option of paying all arrearages at least five days before the sale. If he or she is not able to do so, then the trustee may go through with the sale as early as 21 days after the first publication.
A sale must be conducted at the location referenced on the notice of sale between 9 a.m. and 5 p.m. The borrower may postpone the sale, but only for one day.
Q: Typically, how long does the foreclosure process in California take?
A:It generally takes no less than 120 days to process, and that’s the estimate for uncontested non-judicial foreclosures. Procedures may be elongated if the borrower pursues litigation, files for bankruptcy, or seeks delays and adjournments of sales.
Q: What is the right of redemption?
A: In California, a party whose property has been foreclosed can reclaim it by paying the full sum of the unpaid loan plus other costs one year after the sale. However, if the foreclosed property was sold at full price bid, then the original borrower has only up to three months to reclaim the property.
Q: What is the California Homeowner Bill of Rights?
A: On January 1, 2013, the California Homeowner Bill of Rights became law, ensuring all California homeowners protection from unfair lending and borrowing practices. Some key provisions in the bill include restriction on dual tracking, guaranteed single point of contact, tenant rights, measures against mortgage fraud, and more. Click here for more details.
Q: Who should I contact if I’m currently experiencing foreclosure issues in California?
A: The Orange County attorneys at McFarlin LLP have helped many California homeowners retain or reclaim their property against the actions of aggressive and/or predatory lenders. Call us today at (888) 728-0044 and we will conduct a comprehensive analysis of your situation and inform you of your best legal options at no cost to you.