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October 22, 2014


Lenders on California properties filed 16,833 "Notice of Default" documents during this three month period from July to September 2014.   When this is done the borrower has 90 days to negotiate or bring current before a Notice of Sale can be filed to sell the property.  In the process the lender must have complied with all the California foreclosure laws. 

The lenderMUST contact you and anyone else on the mortgage loan to assess you financial situation and explore your options to avoid foreclose (called a "foreclosure avoidance assessment"). The lender CANNOT start the foreclosure process until at least 30 days after contacting you to make this assessment, and MUST advise you during that first contact that you have the right to request another meeting about how to avoid foreclosure. That meeting must be scheduled to take place within 14 days. 

You can authorize a lawyer, HUD - certified housing counseling agency, or other advisor to talk on your behalf with the lender about ways to avoid foreclosure. You cannot be forced to accept any plan that your representative and the lender come up with during that discussion.

If you and the lender have not worked out a plan to avoid foreclosure, the lender can then record a Notice of Default in the county where your home is located, at least 30 days after contacting you for the foreclosre avoidance assessment. This is the beginning of the formal and public foreclosure process. The lender sends you a copy of this notice by certified mail within 10 business days of recording it. You then have 90 days from the date that the Notice of Default is recorded to "cure" (fix, usually by paying what is owed) the default.

If you do not pay what you owe, a Notice of Sale is recorded (at least 90 days after the Notice of Default is recorded). The Notice of Sale states that the trustee will sell your home at auction in 21 days.

The Notice of Sale must:

1. Be sent to you by certified mail.

2. Be publushed weekly in a newspaper of general circulation in the county where your home is located for 3 consecutive weeks before the sale date.

3. Be posted on your proeprty, as well as in a public place, usually at your local courthouse. Have the date, time, and location of the foreclosure sale; the property address, the trustee's name, address, and phone number, and a statement that the property will be sold at a public auction at least 21 days after the date when the Notice of Sale is recorded the property can be sold at a public auction. 

The successful bidder must pay the full amount of the bid immediately with cash or a cashier's check. The successful bidder gets a trustee's deed once the sale is complete. The lender usually bids at the auction, in the amount of the balance due plus the foreclosure costs. If no one else bids, youor home goes to the lender. 

NOTE: Before the foreclosure process begins, the lender or loan servicer may send you letters (over the course of several months) demanding payment. Those letters are NOT Notices of Default.

STOPPING THE FORECLOSURE SALE:You have up until 5 days before the foreclosure sale to cure the default and stop the process. This is called "reinstatement" of the loan. During the 21 day period after the Notice of Sale is recorded, any person or institution (like a bank) with an interest in your home has the right to redeem the home up until the non-judicial foreclosure sale/auction. This means that they must pay the entire loan in full. 

AFTER THE FORECLOSURE: Whoever buys your home at the foreclosure sale/auction cannot just change the locks to the home. THe new owner must serve you with a 3 day written notice to "quit" (move out) and, if you do NOT move out in 3 days, go through the formal eviction process in court in order to get possession of the home. That process typically take several weeks.