Foreclosure Resources

When can I start a foreclosure?

The lender can generally start the foreclosure process even after only one payment has been missed and without informing the borrower of his or her intent to do so. However, changes to California law in 2008 now require that a lender take certain actions before starting foreclosure proceedings on owner-occupied residential property containing no more than four dwelling units. For more information on these requirements, please contact our office at (619) 325-4336 or toll-free at (866) 218-2320.

How long does a foreclosure take in California?

The foreclosure process takes a minimum of four months from beginning to end. California law requires that the following time table be met

Step 1:

Notice of Default is recorded

Three (3) months pass

Step 2:

Notice of Trustee’s Sale is published

21 days pass

Step 3:

Sale Date

Who pays the foreclosure costs and expenses?

Typically, the Note and Deed of Trust require that the borrower pay the costs and expenses incurred during the foreclosure process. During the foreclosure process, the lender who initiates the foreclosure process will be invoiced for costs and expenses incurred. If the borrower desires to bring current their account or pay off the debt entirely, he or she must pay all costs and expenses. Should the property be purchased by a third-party at the sale, the costs and expenses will be paid by the buyer at the auction. If no third-party buyer purchases the property at the sale, the lender will be responsible for payment of all fees and expenses.

What rights does the borrower have during the foreclosure process?

If the loan has not matured, the borrower can stop the foreclosure process by reinstating the loan through payment of all delinquent amounts owing. If the loan has matured, the borrower must generally pay off the loan entirely to avoid losing the property at a foreclosure sale. The borrower frequently seeks to payoff the loan by refinancing with a new lender or by selling the property.

What happens at the sale?

The auction usually occurs at the entrance of the courthouse or city or county building in the county where the property is located. The starting bid may be as high as the full amount the borrower owes the lender, including foreclosure fees and expenses. Lenders often choose to enter an opening bid that is lower than the full amount owed. If no one bids for the property, the lender will become the owner of the property being auctioned. If the property is desirable and is being auctioned at a good price, third-party buyers may show up to bid for the property. The lender may choose to bid for the property as well. Whoever ends up purchasing the property, it is essential to remember that, generally speaking, while most junior liens will be “wiped out”, the senior liens will attach to the property and the new owner will be responsible for their payment.