A foreclosure is a legal process in 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 3 phase foreclosure process.  This includes coordinating the paperwork required by government codes and industry regulations, and directing the sale of the 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 actual 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, address of the property and the date of recording. 

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, 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 will instruct the trustee to publish and post a Notice of Trustee's Sale (NOS). This published and posted notice states that the subject property will be sold to the highest bidder after 21 days from publication of said notice.

The lender must accept the Trustor's reinstatement if it is tendered more than 5 days before the sale. Within 5 days of the sale the lender may refuse reinstatement and demand full payment. Lenders will often allow reinstatement during the Publication Period.

PHASE 3:  OBTAINING POSSESSION OF THE PROPERTY

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