California Foreclosure Laws

Expected Timeline: Around four months
Security Instrument: Deed of Trust
Type of Process: Judicial or nonjudicial. The vast majority of foreclosures are nonjudicial.
Protections for Servicemembers: Cal. Mil. & Vet. Code § 400 to 409.13
Time to Respond: Homeowners must be contact by bank at least thirty days before notice of default is sent. Notice of default is ninety days; notice of sale twenty-one days.
Reinstatement Period: Allowed any time up to five days before sheriff sale.
Protections for High-Cost Mortgages: Cal. Fin. Code § 4973 and 4978
Redemption Period: There is no redemption if the deficiency judgment is waived or prohibited in the case.
Eviction Process: There is no redemption if the deficiency judgment is waived or prohibited in the case.
Deficiency Judgments: Not allowed in nonjudicial foreclosures.
Limits on Deficiency Judgments: No deficiency allowed under judicial foreclosure unless there is no redemption period, and no deficiencies are allowed under nonjudicial foreclosure. Deficiencies that are allowed are limited by fair market value of property.
Cash Exempted in Bankruptcy: Up to $22,000
State Statutes: Cal. Civ. Code § 2924 to 2924l

The Judicial Foreclosure process is rarely used in California . It will only be done if there is no power of sale clause in the original loan documents, or if the lender wishes to pursue a deficiency judgment against the borrower. If this process is used, the lender sues the borrower to obtain a decree of foreclosure and order of sale; the court may give the borrower a right to redeem the property for up to one year.

The Non-Judicial Foreclosure process is more common in California , and is used when there is a power of sale clause in the original loan documents. This clause authorizes the lender to sell the property in case of a default. If the loan documents specify the place, time, and terms of the sale, then those details must be adhered to. If they do not specify the time, place, and terms of the sale, then there are a series of guidelines that must be followed.

A notice of default is recorded in the county that the property is located in, and a copy of the notice is sent to the borrower within ten (10) days of the notice being recorded. The borrower is given ninety (90) days from the date the notice is recorded to cure the default.

1. After the ninety days, if the borrower is unable to cure the default, a notice of sale is recorded. The notice states that the lender or trustee will auction the property within twenty-one (21) days of the notice. Copies of the notice are sent to the borrower by certified mail, as well as posted in a county newspaper for three consecutive weeks before the sale. The notice is also posted directly on the property, as well as in a public forum, such as the county courthouse.
2. The sale is conducted by the lender's representative at the scheduled time and date. The high bidder must immediately pay the full winning bid amount by cash or certified check and receives a trustee's deed once the sale is completed. The lender will usually bid on the property for the amount of the due loan balance plus costs. Ownership of the property reverts to the lender if there are no other bids.
3. The lender can not sue the borrower for a deficiency judgment, and the borrower has no right of redemption after the sale of the property.

State Website: www.leginfo.ca.gov