1.      What is a foreclosure?

2.      What types of foreclosure are there?

3.      In California how long does it take to foreclose?

4.      Can you shorten the process or postpone the Sale?

5.      Can the property owner cure the foreclosure and get out of foreclosure?

6.      Who Pays for the Foreclosure Action?

7.      How do I check property liens, value and equity?

8.      What is a foreclosure auction?

9.      How is the opening bid at a foreclosure auction determined?

10. What is a Trustee Sale?

1. What is a foreclosure?

A foreclosure is a legal process in which a bank or other secured creditor sells or repossesses a piece of real property because the owner has failed to make payments on their loan. There are three ways the foreclosure process can end:

   A. The borrower makes an arrangement with the lender to pay off the default amount to reinstate the loan.

  B  The borrower sells the property during the pre-foreclosure period. If the borrower sells the property during this stage they will avoid having a defaulted loan on their credit history.

C.  If the property is not sold at auction or the lender purchases the property at auction the lender gains possession of the property.

2. What types of foreclosure are there?

Judicial foreclosure action is a proceeding in which a mortgagee, a trustee or another lien holder on property requests a court-supervised sale of the property to cover the unpaid balance of a delinquent debt.
Non-judicial foreclosure is the process of selling real property under a power of sale in a mortgage or deed of trust that is in default. In such a foreclosure, however, the lender is unable to obtain a deficiency judgment.

3. In California how long does it take to foreclose?

The minimum time frame for foreclosure is detailed in California Civil code Section 2924. This time period is three (3) months (not 90 days), plus at least twenty -one (21) days.  This minimum does not take into consideration normal delays, which might occur during a normal foreclosure action.

If all documentation is returned to our office when required, the foreclosure actions should take approximately 120 days.  There are some situations, which could delay a foreclosure.

4.  Can you shorten the process or postpone the Sale?

The rules of foreclosure are strict and for the protection of both the lender and the owner of the property. The process cannot be shortened; however, the lender can request the trustee to postpone a sale date.

5. Can the property owner cure the foreclosure and get out of foreclosure?

Yes. If the property owner wants to save their property they can bring the past due amounts current or payoff the loan if there is a balloon payment due.  They are free to sell the property, or refinance it through another lender.

6.  Who Pays for the Foreclosure Action?

According to the Note and Deed of Trust, the trustor (owner of the property) is responsible for the fees and charges incurred during the collection of the past due sums. If the owner of the property desires to cure the foreclosure, all past amounts and foreclosure fees will be collected from them. 

During the foreclosure action, the beneficiary will be invoiced for fees and charges incurred. These costs will be reimbursed to the beneficiary if the owner of the property cures the foreclosure action, or if the property is sold at the foreclosure sale to a third party.

7. How do I check property liens, value and equity?

Contact the local property assessor (either through county or city government) and ask who is listed as the owner of the property. The assessor should also have the owner's mailing address. Go to statelocalgov.net to find the local property assessor in your area.

It's important to research liens before you buy a property, whether the property is a foreclosure or not, because you as the buyer may be responsible for paying off those liens.

8. What is a foreclosure auction?

Generally the foreclosure auction comes at the end of the foreclosure process when the homeowner can no longer repair their financial problems with the lender. As with any auction the person with the highest bid gets the foreclosed property. Remember if you are going to be buying a home at a foreclosure property auction you will be bidding against other investors and potential homebuyers. Do your homework in advance and know how much the property is worth, how much is still owed on the property and if there are any liens against the property.

9. How is the opening bid at a foreclosure auction determined?

The opening bid at a foreclosure auction is based on the total amount owed to the foreclosing lender, interest incurred, late charges, penalties any liens placed on the property by other institutions, and may include fees incurred because of the foreclosure proceedings. If no one at the auction places a bid above the opening bid amount the foreclosing lender gains possession of the property. Buyers at the sale must come prepared to pay with cash or cashier’s check for the total amount of the sale price.

10. What is a Trustee Sale?

The trustee sale is a public auction. It is typically held at the county courthouse on the proverbial courthouse steps. Actually, they are usually held inside the doorway or in the lobby of the courthouse

It is called a trustee sale because in this state we do not normally finance property with a mortgage, we use a legal document called a deed of trust. The advantage of the deed of trust is that the lender does not have to go to court to foreclose, as they would if they used a mortgage.

Under the deed, a third party called a trustee is appointed to handle the sale of the property if and when a lender is forced to foreclose on a borrower. The trustee is responsible for advertising the sale, delivering all the required notices and literally selling the property at auction on the courthouse steps.

GLOSSARY OF TERMS - from the Department of Real Estate.