Foreclosure is a legal process through which a bank or other secured creditor sells or repossesses a piece of real property because the borrower has failed to make payments on their loan. Pacific Oak Foreclosure Services, Inc. is appointed by the lender, and is substituted in as trustee, to facilitate the foreclosure process. This includes coordinating the paperwork required by industry regulations and law, and directing the sale of property.

PHASE 1:  THE NOTICE OF DEFAULT PROCESS
PHASE 2:  NOTICE OF TRUSTEE'S  SALE
PHASE 3:  OBTAINING POSSESSION OF THE PROPERTY

PHASE 1:  THE NOTICE OF DEFAULT PROCESS

Foreclosure proceedings are initiated with a Notice of Default (NOD). The Notice of Default is recorded at the request of the lender by the trustee who, in effect, gives notice to the public that the loan is now in default of payment.

The recording of the NOD takes place at the County Recorder's Office in the county in which the property is located. It denotes essential data pertaining to the trust deed, including the amount in arrears and address of the property.

In the state of California the borrower (Trustor) has three months from recordation of the Notice of Default to reinstate the loan (to make the loan current by clearing all payments in arrears, any late charges, and/or other deficiencies), or payoff the loan. The law requires that the lender accept the Trustor’s reinstatement payment or payoff during this three month period.

PHASE 2:  NOTICE OF TRUSTEE’S SALE

If the Trustor does not reinstate or payoff the loan within three months, then the lender may instruct the trustee to record, publish and post a Notice of Trustee's Sale (NOS). This notice states that the subject property will be sold to the highest bidder at least 21 days from recordation, first publication and posting of said NOS.

The lender must accept the Trustor's reinstatement if it is tendered up to 5 days before the sale. Within 5 days of the sale the lender may decide whether to allow reinstatement, or refuse reinstatement and demand full payment.

PHASE 3:  OBTAINING POSSESSION OF THE PROPERTY

The foreclosure sale takes place at a designated location in the county in which the property is located. Proceeds from the sale are disbursed to all lien holders in order of the priority of their recorded liens. If the auction is unsuccessful at attaining a buyer at the minimum bid price, the property reverts back to the lender.