California Deed of Trust Process
The deed of trust is essentially a document that secures the mortgage on your home. Typically, a title insurance company or escrow company, also known as the trustee, acts on behalf of your lender and holds the deed until your home loan is paid in full. If you own property in California and you are delinquent on your loan, it is valuable to be familiar with the California deed of trust process for a property in foreclosure.
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Identification
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By law, a deed of trust involves three parties: the borrower (trustor), the lender (beneficiary) and the neutral third party (trustee) who is granted foreclosure rights. Typically, a deed of trust contains a "power of sale" clause giving the trustee legal powers to enforce collection of the debt. Collection of the loan debt is ultimately enforced, by the lender's right to start foreclosure proceedings and sell your property if you fail to make mortgage payments.
Significance
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California, along with 13 other states, implements a non-judicial or deed of trust foreclosure process. A non-judicial foreclosure does not involve the courts, with procedure requirements dictated instead by state statutes. If you default on your loan, the lender will send you a Notice of Default. If you fail to bring the loan current, you will then receive a Notice of Trustee's Sale from the lender, and after the legally required time period has passed, your property will be sold at public auction.
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Notice of Default
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The California deed of trust process begins with the filing and recording of a Notice of Default at the county recorder's office in the county where your property is located. The Notice of Default explains the delinquent amount and how much is necessary to bring the mortgage current. You then have three calendar months to restore your loan before the foreclosure proceeds into the Publication Period.
Notice of Sale
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During the Publication Period of the foreclosure process (roughly 30 days), the trustee prepares a Notice of Sale. The trustee publishes the Notice of Sale once a week for three weeks in a general circulation newspaper from the area where your property is located. The Notice of Sale states the auction date for the property, the total arrearages on the loan and the estimated amount necessary to pay off the loan.
Time Frame
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With the California deed of trust process, as a borrower, you can reinstate your loan up to five days before the foreclosure sale or public auction. During the five days prior to the auction, lenders can accept past due amounts for the purpose of reinstatement of the loan, or they may demand payment in full. A non-judicial, or deed of trust foreclosure, is usually quick because a court order is not necessary to foreclose, and court supervision is not required for the sale of the property.
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