California Foreclosure - Non-Judicial Foreclosure

The most basic form of California foreclosure is the non judicial foreclosure. This type of foreclosure does not need any court intervention. The property title remains with the trustee in the deed of trust until a complete payment is received against the borrowed loan. There are some complicated set of rules concerning California foreclosure in a mortgage.

Basic Laws Concerning California Foreclosure

When the mortgage is signed, a clause, which is known as the power of sale clause, exists. Under this clause the trustee has the authority to sell the property in order to pay the loan when it still hasn’t been paid. The trustee is not acting on his own accord. He is merely a representative of the lender. The decision for sale actually resides with the lender. The sale, in this case, usually takes place in the form of an auction. This is a California foreclosure sale in which the company acts as a trustee and manages the sale.
The one action rule in California foreclosure does not allow a second trial to recover a deficiency judgment in non judicial means. There is a provision for recovering a deficiency judgment in case of judicial California foreclosure. In this case, the lender may recover a deficiency judgment under some circumstances. The only reason why the judicial foreclosure is avoided is that it takes more time. Though the non judicial system of foreclosure is faster, it has severe notice requirements within the deed of trust.

Power of Sale Notice Requirements

One of the most basic requirements for the issuance of a power of sale notice is the occurrence of a default. The notice of default is issued when there is a substantial default. To be called a substantial default, the time period should be six months at the very least. A period this long is called the redemption period. For as low as 60 days, the California foreclosure process is not moved forward.
The defaulter must get the notice 20 days prior to the foreclosure sale. It should be mailed to both the defaulting borrower and any other lenders who have stakes in the property to be sold. The property that undergoes auction in this way should be marked. It should also be posted in a place where the public can get to know of this California foreclosure sale. The foreclosure sale headed by the trustee is then undertaken soon after the 20th day of the first publication.  

A California foreclosure could be undertaken on any working day within the official timings at a location mentioned in the notice of sale. However, the action could only be postponed for a day if the borrower request for it. As it will follow auctions’ usual procedure, all participating members must be present. The auction would be awarded to the highest bidder. The lender could also join the bid.
In California, the lender can also go for judicial foreclosure where the court will order the final judgment of foreclosure. This is done when the deed of trust does not contain the power of sale clause in it. The procedure that follows remains the same as that mentioned earlier.