Foreclosure is a legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments. In California, foreclosure can be a lengthy and complex process, with specific deadlines and procedures that must be followed. This blog post will outline the key deadlines in the foreclosure timeline in California.
The pre-foreclosure period begins when a borrower misses their mortgage payments. During this time, the lender will typically attempt to contact the borrower to resolve the payment issue. This period can last for several months as lenders are often required to wait until the borrower is at least 120 days delinquent before starting the foreclosure process.
The Notice of Default (NOD) is the first formal step in the foreclosure process. It is a public notice that the borrower has defaulted on their mortgage. In California, the lender must wait at least 30 days after contacting the borrower to discuss foreclosure alternatives before filing a NOD. Once the NOD is filed, the borrower has 90 days to bring their mortgage current.
If the borrower does not cure the default within the 90-day period, the lender can file a Notice of Trustee Sale (NOTS). This notice must be filed at least 20 days before the scheduled sale date. The NOTS will include details about the sale date, time, and location. The borrower still has the opportunity to reinstate the loan up until five business days before the sale.
The Trustee Sale is the actual auction of the property. It is typically held at a public location and the property is sold to the highest bidder. If no one bids on the property, it reverts to the lender. The Trustee Sale date is set at least 20 days after the NOTS is filed.
California does not have a post-sale redemption period for non-judicial foreclosures, which are the most common type. This means that once the property is sold at the trustee sale, the borrower does not have the right to reclaim it by paying off the debt.
After the foreclosure sale, the new owner or the lender (if the property reverted to them) must take steps to evict any occupants. They must serve a Notice to Quit, giving occupants at least three days to vacate. If the occupants do not leave, the new owner must file an unlawful detainer lawsuit to evict them, which can take several weeks to several months.
Understanding the foreclosure timeline and key deadlines in California can help borrowers navigate this challenging process. It is essential for borrowers facing foreclosure to seek legal advice to understand their rights and options.