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The Foreclosure Process in California

Defaulting on one’s loan causes the start of foreclosure process in California, the process by which the lender takes over the home in order to recover their principal investment.  The primary foreclosure process used in California is the non-judicial foreclosure process.  Fortunately, lenders want your money and the interest that comes with it, not your house. But if the lender chooses to take your house, the California non-judicial foreclosure process is used in most cases because it is faster and less costly (for them) than the judicial foreclosure process. 

This California non-judicial foreclosure process kicks hundreds of homeowners to the curb every day.  A non-judicial foreclosure typically takes as little as 120 days from the day that the NOD (notice of default) is recorded.  The non-judicial foreclosure process in California is adminstered by the lender's attorneys, and they rarely make mistakes that would prevent them from taking your home once they make the decision to do so.

Alternatives to Foreclosure in California

Homeowners who are overdue on their monthly mortgage will be contacted by the lender to identify alternatives to the foreclosure process in California.  Homeowners might not be provided with the options they want or that make sense, however.  For example, payment plans offered might actually be higher than the original monthly payments that were missed.  To make matters worse, often lenders will not make their best possible offer, and are reluctant to make any other concession to the homeowner if it has a cost for the lender.  This process can be especially unpleasant for homeowners who have borderline affordability issues. 

After the lender’s review is completed, the foreclosure process in California authorizes the lender to file the notice of default and begin the official “foreclosure”.

Don't let yourself get to this stage of the foreclosure process in California. Find out why Short Sale might be a better option.

The Foreclosure Process in California


The foreclosure process in California - Notice of default

To start the California foreclosure process, the lender is required to make contact with the property owner to identify alternatives to foreclosure before a "Notice of Default" may be filed. (CC 2923.5.(a)(1) 

After this process is completed, the foreclosing lender’s trustee may record a “Notice of Default” with the County Recorder. 

A copy of the "Notice of Default" is mailed to the property owner who is subject to foreclosure.  CC 2924c.(a)(1)

The foreclosure process in California - Notice of Trustee Sale

The next step in the California foreclosure process, is the Notice of Trustee Sale: 

  • After 90 days, the foreclosing lender’s trustee performs some ministerial procedures which could take up to a week to complete.  
  • Next the “Notice of Trustee Sale” is recorded with the County Recorder which indicates what the date of the auction will be. 
  • A copy of the “Notice of Trustee Sale” is served to the property owner who is subject to foreclosure.  CC 2924 c.(b)(1)

The foreclosure process in California - The Auction

The next step in the California foreclosure process, is the Auction. 

  • The Initial auction date can be as little as 14 days after the Notice of Trustee Sale is recorded.  CC 2924 f.(b)(1)
  • During this step, the property is sold in a public location to the highest bidder. 
  • The opening bid price is set by the trustee as directed by the investor on the loan. 
  • The price is usually based on the amount of debt and any associated legal fees. 
  • Quite often, auctions are postponed because the lender is working with the homeowner to avoid the foreclosure auction.  Auctions may be postponed for up to one year.  CC 2924 g. (c)(1)

The postponement process is not an official step in the California foreclosure process, but perhaps it should be because most auctions are postponed several times.  Auctions may be postponed for several reasons.

The foreclosure process in California - The Deed Transfer

The final step in the California foreclosure process is the transfer of the trustee’s deed:  The trustee’s deed transfers property to winning bidder. By default, this will be the lender if no bid higher than the lender's opening bid is received. CC 2924 h. (c)

Don't let yourself get to this stage of the foreclosure process in California. Find out why Short Sale might be a better option.