The foreclosure process in California is a little bit different than it is in many other states, in fact most other states. California is what’s called a non-judicial foreclosure state. So what that means is that a court and a judge is not involved in the foreclosure process. The whole process takes place by operation of law and by the lender and their designated trustee just simply filing documents and recording documents on title to the property that they are seeking to foreclose on. This is good in a way and bad in a way. It’s bad in that it can go very fast for borrowers. Non-judicial foreclosure is a lot faster than a judicial foreclosure in states such as Florida where it’s required that the lender go into court and get a judge’s approval for the foreclosure process.
The other downside to non-judicial foreclosure is that no one is really looking at, no one is scrutinizing it because there is no judge involved. No one is looking at the documents or even considering whether they are accurate or not. So these can be negatives about the non-judicial process. One good thing about it though is that you can challenge it. As a borrower you can file a lawsuit calling into question the process itself and whether it was done properly or accurately and request that it go in front of a court to be scrutinized. There are also a lot of home owner protections that have been initiated in California recently. In 2013, the California legislature passed what’s called the Homeowner’s Bill of Rights which gives a lot of new protections for California homeowners that most states don’t have.
In California they made illegal what’s called dual tracking which is where the lenders negotiating with you on a loan modification and then at the same time marching through to the foreclosure process. Dual tracking was made illegal and that’s great. I think just about any other state lenders can do that. The other thing that you are entitled to in California is a single point of contact and a fair and transparent loan modification review. So these are good things that if you are facing foreclosure, you can certainly request a fair and transparent review and if you don’t receive it, you can file a lawsuit against your lender essentially demanding it and until they provide you a fair and transparent review, the law says they are not allowed to foreclose.
As far as the process itself, once the lender decides that the borrower is sufficiently behind on payments and they are going to begin the actual foreclosure process, it goes very quickly. Before it starts, the lender has the duty to send out notices and attempt to reach out to the borrower and work with them on a loan modification, let them know that there are programs in place that can help them and do their best to try and work something out with them. After the lender goes through with that process they can then file what’s called the Notice of Default and Election to Sell. That’s the official document that’s recorded on title to the property the lender is looking to foreclose on and it’s also delivered to the property itself.
So the borrower will receive it either by certified mail and in most instances it’s taped to the property door or something along those lines. So it’s very clear that something has happened, some notice has been filed. After the notice of default has been filed, there is a 90 day period where the borrower gets an opportunity to catch up on the mortgage, reinstate the back payments that haven’t been made and they are late along with interest and late fees and whatever else. There is that period of time that has to pass, the lender can’t take any action less than 90 days after the notice of default has been filed but once that time period passes, the lender is then eligible to file the next official document called the notice of sale.
Typically, shortly after the 90 days pass, the notice of sale is filed in the same manner as the notice of default. It’s filed at the county on title to the property and then is also delivered to the property address. On the notice of sale, an actual sale date will be set and noticed. On that document, it will say on this day, at this time your property will be sold at a public auction and that date can’t be less than 21 days after the notice of sale. Typically, it goes very fast. You get the notice of sale, you may not even realize that you’ve gotten it until it was a few days after it was already filed and then 3 weeks later, they can actually sell the property. If you are in foreclosure or if you’ve had either of these documents come through or you think that the lender is going to foreclose, it’s a good idea to speak to a foreclosure defense attorney.
If you don’t want your property to be foreclosed on there may be some options for you. Alternatively, if you just need more time and you want to stay in control of the process rather than have the lender dictate exactly what happens, you may well be able to do a short sale which is also a great thing to speak to a foreclosure or real estate attorney about because that’s a negotiation between you the borrower and the lender and the negotiation process can be tricky. Definitely pay attention. The worst results happen when you ignore these things but know what’s going on. Be proactive, speak to a professional about what’s going on, what your options may be and most of us will offer an opportunity to come talk for free at no charge. You can get your rights explained to you and have your situation analyzed by an attorney and see what options you have.
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