Foreclosure is the legal process by which a lender forces the sale of real property in order to be repaid the money it has loaned the buyer of the real property.
The process of foreclosure is regulated by state law and therefore the procedural aspects of foreclosure will vary from state-to-state. Some states require “judicial foreclosure” while other states allow “non-judicial foreclosure” and there are even states that allow both methods of foreclosure.
Here in California, both non-judicial foreclosures are allowed.
If a mortgage or deed of trust contains a “power-of-sale clause,” the lender may foreclose without having to file a lawsuit. A power-of-sale clause is the clause in a deed of trust or mortgage, in which the borrower pre-authorizes the sale of property to pay off the balance on a loan in the event of their default.
In deeds of trust or mortgages where a power-of-sale exists, the power given to the lender to sell the property may be executed by the lender or their representative, typically referred to as the trustee. Regulations for this type of foreclosure process are outlined below in the “Power-of-Sale Foreclosure Guidelines”.
If the deed of trust or mortgage contains a power of sale clause and specifies the time, place and terms of sale, then the specified procedure must be followed. Otherwise, the non-judicial power of sale foreclosure is carried out as follows:
A written notice of intention to foreclose by power of sale must be sent by certified mail to the borrower at the borrower’s last known address. The notice must describe the defaults of the borrower under the loan, and give the borrower thirty five (35) days from the date the notice is sent to cure the problem. If the borrower cures the default within the thirty five (35) days, then the foreclosure can be stopped. However, if there have been three (3) defaults, then the lender need not send another notice of intent to foreclose, and if the borrower has been in default four (4) times in the past twenty four (24) months, and has been notified as above, then no further notice will be required.
If you’re facing home foreclosure in California and would like to know more, contact the Hedtke Law Firm. We will respond immediately and will show you why we are the best in the business. Call us today!