Losing a home during a California divorce often worsens the financial difficulties the spouses are already facing. However, there are often options that a homeowner can pursue which will save their home from foreclosure or may lessen the loss.
The Law Offices of Edward Misleh, APC is a Sacramento law firm, located in Sacramento, California that handles California community property issues. Due to the fact that we primarily represent clients with family law matters, we are able to provide our Sacramento, California clients and clients in Northern California with services they need and deserve. Call now our Lawyer Hotline. We offer a free consultation to all new clients. Affordable rates and payment plans are also available. Call now 916-443-1267 for your free consultation.
The California foreclosure process begins when your lender (usually a bank) notifies you of a default – that you have missed a monthly loan payment. What many homeowners do not realize is that there are specific requirements and time limits that must be met for your bank to file a California foreclosure action. There are two types of actions that a lender can pursue; Judicial foreclosure and Non-judicial foreclosure.
A trustee who represents your lender can sell your home at an auction to satisfy the loan should you default. The mortgage documents must contain a power of sale clause for this to occur. It will usually take the lender a minimum of 120 days to complete this process. However, this process can be delayed if the borrower contests the action in court, seeks a delay, or files for bankruptcy.
In a non-judicial California foreclosure the lender is prohibited from filing a second action to recover on a deficient judgment. Deficiency judgments may not be obtained when a property in foreclosure is sold through a non-judicial public sale or if the California foreclosure relates to a purchase money mortgage. The debt you owed is satisfied through this action and you are not liable for a deficiency – the home sold for less than the amount owed to the lender and you are not required to make-up the difference.
Notice of Default Requirement
The lender must record a notice of default in the county in which the property is located when the loan is in substantial default (six months or more past due). The redemption period (time you have to pay any amounts owed) starts after this notice is filed and; the California foreclosure process cannot move forward for a minimum of 60 days and, the borrower is given 90 days to cure any default. Junior lien holders do not have this right.
Notice of Sale Requirement
The lender must record a notice of sale in the county in which the property is located with the following information; trustee’s name and address, description of the property under a California foreclosure, beneficiaries name, and other information at least 14 days before a foreclosure sale – this is the publication period.
Twenty-day Notice Requirement
The borrower must receive this notice 20 days before a foreclosure sale.
Notice of California Foreclosure Requirement
The lender must mail to the defaulting borrower and other creditors whose liens affect the property a notice of California foreclosure. This notice must also be posted at the property being foreclosed upon and in a public place in the county where the sale will occur. The defaulting borrower may prevent the foreclosure sale by paying all arrearages up to 5 days before the sale. If not paid, the foreclosure sale then occurs at the earliest 21 days after the first publication.
California Foreclosure Sale
The foreclosure sale must take place on a business day between the hours of 9 am and 5 pm at the location referenced in the notice of sale. The property is auctioned to the highest bidder which includes the lender. The borrower is permitted to postpone the sale for 1 day.
The lender files a motion with the court to issue a final judgment of a California foreclosure on a mortgage that does not contain a power of sale clause. The lender also files a lis pendens, or public notice that the property is being foreclosed upon, with their petition. The property is then sold as part of a publicly noticed sale.
Statutory Right of Redemption
The former home owner whose property was foreclosed on and sold can reclaim it by making all unpaid payments, plus costs, up to one year after the foreclosure sale. The one exception is if the original lender made a bid for the full price which shortens the redemption period to three months. There is no statutory right of redemption if a deficiency judgment is waived or prohibited.
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