California Foreclosure Timeline

Notice of Default (NOD) filed = foreclosure timeline begins

• Typical California foreclosure timeline from start to finish = 120 days

Reinstatement Period (Day 1 - 90)

• Notice of Default (NOD) is filed, signaling the start of the foreclosure timeline.
• Borrowers (debtors) are sent a copy of the NOD by regular and certified mail within 10 business days of the NOD file date.
• All junior lien holders are sent a copy of the NOD by regular and certified mail within 30 days of the NOD file date.
• A Trustee's Sale Guarantee Report (TSG) is ordered from a title company to provide pertinent title documentation.
• The foreclosure process enters a dormant period for the next 60 days unless the loan is reinstated/cured by the borrower.
• Special Note: debtors are able to reinstate their loan up to five days before a nonjudicial foreclosure sale.

Publication Period (Day 90 -111)

• 90 days after the NOD was filed - starts the beginning of the publication period.
• A Notice of Trustee's Sales (NTS/NOS) is prepated and published in an adjudicated paper of general circulation in the county in which the property is located.
• The NTS is published one time per week for three weeks. The Trustee's Sale Date is established by adding 21 days to the date the NTS was first published.
• 25 days prior to the sale date a copy of the NTS is sent to the IRS - only if there is an IRS lien against the property.
• The NTS must be mailed certified, return receipt requested, to the borrower at least 20 days prior to sale.
• The NTS is posted on the property at least 20 days prior to sale and posted in one public place in the county where the property is to be sold.
• At least 14 days prior to the Sale date, the NTS must be recorded in the county in which the property is located; this is usually done at the County Recorder's Office.

Trustee's Sale (Day 111 - 120)

• The property is auctioned off to the highest bidder for the full amount of debt plus foreclosure fees and expenses. The full amount must be paid for in cash/cashier's check. The Trustee can require bidders to show proof of funds as evidence to pay the full bid.
• Each bid is by law an irrevocable offer to purchase. However, a higher bid cancels an earlier bid. It is unlawful and a criminal offense (a fine of $10,000 or up to one year in jail) to offer anyone consideration not to bid, or to fix or restrain the bidding process in any manner.
• If there are no bidders at the Trustee's Sale the property will automatically revent back to the beneficiary. The property is now referred to as Real Estate Owned (REO). Please see Foreclosure Auction Scenarios for a better understanding of this process.
• Upon sale of the property, a Trustee's Deed is recorded in the county where the property is located, transferring title to the new homeowner.
• Special Note: debtors are able to reinstate their loan up to five days before a nonjudicial foreclosure sale.
• All sales under a power of sale in a deed of trust must be made between the hours of 9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the Notice of Trustee's Sale. Recently, due to the increase in foreclosures, Saturday dates may be added.

NOTES:

• Junior lienholders may try to protect themselves by (1) advancing funds to being the senior loan payments current, then foreclosing for the sums advanced; (2) acquiring the property by bidding at the foreclosure.
• Junior liens do not reattach to the property once it has been foreclosed upon. If the highest bid is not enough to cover the first mortgage payoff, then all junior liens will be wiped out completely. This helps borrowers by encouraging the junior lienholders to bid up to fair market value for the property at the foreclosure sale, or else lose out.
• Lenders may not seek a deficiency judgement if (1) the foreclosure in nonjudicial or if (2) foreclosure is on a purchase money obligation.
• The same rules do not apply to guarantee or later lienholders. The lenders may seize alternative collateral. If the lender forecloses by filing a lawsuit, then the lender can obtain both a foreclosure sale order and a judgement against the borrower for a deficiency after the court-ordered sale, but only for the difference between the judgement and the fair value of the security.

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