How The California Foreclosure Process Works

By Author: Rob Nichols
Total Articles: 8
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During the economic downturn, California saw the largest set of foreclosures of any state. Known as a consumer friendly state for foreclosure, California had thousands of people who fell behind on their mortgages and were forced to give up their homes. California has what’s known as trustees who own the deed or title of the home. Once the deed is paid for, the lender, or homeowner, owns the title. However, during the downward spiral of the economy, thousands of trustees were following rigid rules to properly evict residents and sell properties.

Basics of California Foreclosure

California is known as a title theory state, meaning the property the lender has sought to purchase remains in trust until the payment of a loan is fully completed. A mortgage or deed of trust secures the title of the property, and trustees can sell off the deed if an individual falls behind on his payments. However, a trustee will only do so once a homeowner has fallen behind on his mortgage for six months or more. Once the loan has fallen into what’s known as delinquency, only then can the trustee proceed to auction off the home. Of ...
... course, most individuals will consult with a local attorney, such as a Thousand Oaks bankruptcy lawyer, before actually allowing the trustee, or bank, to foreclose on a home.

Foreclosure Process

Once the trustee notices several missed payments, it will file the process with the state to foreclose on the home. Almost all mortgages come with a power of clause provision that allows the trustee to take the home if the lender defaults on his payments. Once enough delinquent payments have occurred, the trustee will foreclose on a home under a method known as non-judicial foreclosure.

The trustee will issue the lender a notice of default after six or more months of non-payment. During this time, the foreclosure process will not take place for a minimum of 60 days. At the time of the waiting period, most individuals will begin to consult an attorney; for instance, some may speak to a Sherman Oaks bankruptcy lawyer for help. Once the 60 days are up, the trustee will issue the lender a 20-day notice prior to the sale of the home. The notice will inform the individual that the home will go to the highest bidder, including the current owner.

On the auction day, the trustee will conduct the sale on a business day from the hours of 9 am to 5 pm, selling the house to the highest bidder. If the homeowner wishes, he may postpone the sale for one additional day, but most typically do not.