California Foreclosure Law

California foreclosures law have effect both in court and out-of-court. Process timeline typically takes 120 days period in California State. California foreclosure law holds up the deed of trust and mortgage as primary security instruments. California foreclosure law permit right of redemption despite that it varies in different settings. Deficiency Judgments are allowed by California foreclosure law however it varies according to term and conditions.
Using non-judicial or judicial foreclosure process lenders in the state of California may foreclose on deeds of trusts or mortgages in default.

Judicial Foreclosure
A judicial process of foreclosure demands that the lender file a lawsuit to get a court order to foreclose on a particular property in case of default. The Judicial process of foreclosure is usually used when no power of sale is there in the mortgage or deed of trust. ”Power of sale clause” in a deed of trust or mortgage authorizes the sale or transfer of land as mentioned by the terms of that clause.
By the use of judicial foreclosure process in California, lenders are allowed to seek a deficiency judgment. The borrower may avail the opportunity to redeem the property up to one (1) year after the sale, under specific circumstances.

Non-Judicial Foreclosure
In case homeowner defaults California non-judicial foreclosure law permits the lender to sell the property and pay off the balance of the loan. Non-judicial foreclosure method is preferential when “power of sale clause” exists in the deed of trust or mortgage document. A “power of sale clause” in a deed of trust or mortgage means that borrower has pre-authorized the lender for the sale of property to pay off the balance on loan if default happens. The power to sell may be performed by the lender or their representative in conditions where a power of sale exists. The modus operandi for this type of foreclosure process is explicated below in the “Power of Sale Foreclosure Procedure”.

Power of Sale Foreclosure Procedure
If the mortgage or deed of trust comprises of the “power of sale clause”, which have details regarding the time, place and the terms of sale in that case the specified course of actions must be followed. If power of sale clause does not state the specifications of time, place and terms of sale then non-judicial foreclosure would be followed as bellow:

• The notice of sale incorporated with the time and location of the foreclosure sale, as well as the property address, the trustee’s name, address and phone number and  auction statement for sale must be recorded in the county where the property is situated no less than fourteen (14) days past to the sale.

• That noticed must be furnished by certified mail with the request of return receipt from borrower at least 20 days prior to sale.

• In any case twenty (20) days previous to the sale notice must be posted in a noticeable place on the property itself and also posted in one public place in the county where the property is situated.

• Up and about five (5) days before to the foreclosure sale, the borrower can restore the default and stop the foreclosure process.

• The sale conditions mentioned in the notice of sale must be strictly followed on a business day between the hours of 9:00 a.m. and 5:00 p.m., anyone may bid at the public auction sale ends in highest winning bid. Trustee may require proof regarding bidder’s ability to pay their full bid amount.

• In any unexpected happening or if necessary the sale may be postponed by announcement at the time and location where it was going to be held.

Lenders carrying the non-judicial foreclosure process are not permissible to look for a deficiency judgment.

The borrower has no rights of redemption if using non-judicial foreclosure process.