California Laws

California foreclosures are overwhelmingly non-judicial because of the presence of Power of Sale clauses in California mortgages. These clauses provide the lender with the right to foreclose on a homeowner in default without obtaining a court order to do so. Judicial foreclosures are only needed in the rare instance that a mortgage lacks a Power of Sale clause or there are problems with the property title itself.

A lender begins non-judicial California foreclosures by filing a Notice of Default with the county records owner. The Notice of Default outlines the amount owed to the lender and provides the homeowner with three months in which to provide payment, after which a foreclosure sale of the property will be scheduled and carried out in order to retrieve the funds lost on the delinquent loan. The homeowner and any Junior Lien holders are entitled to receive a copy of the Notice of Default as soon as it is issued.

In order to stop the foreclosure before a sale occurs, the original homeowner must pay the entire default amount in addition to any interest gathered at least 5 days before the foreclosure sale takes place.

Twenty days before the sale, the lender issues a Notice of Sale and posts it in two public places, as well as on the property facing foreclosure itself. The Notice must also be published for three weeks in a local weekly newspaper before the sale can occur. In addition, the lender has to file a copy of the Notice of Sale with the county registrar at least 14 days before the sale date in question.

When the day of the sale finally comes, the homeowner's property is auctioned off to the highest bidder by a trustee of the lender. Once payment of the winning bid is provided, the winning bidder is entitled to full ownership rights to the property.

California foreclosures law provides no rights to redemption once a non-judicial foreclosure sale is complete. In the case of judicial foreclosures, the court may provide a redemption period if it is deemed necessary.

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