In California, a foreclosure begins when a homeowner has failed to pay his monthly mortgage payment. This process is started by whichever lending company holds this mortgage. The company will send the homeowner a "Notice of Default," which informs him that his lack of timely payments have placed his mortgage, or home loan, in a state of default. The homeowner will then have 90 days in which to respond to the letter and get his account current. Meanwhile, the mortgage company will file the notice with the county and begin making arrangements to put his home on the market, should he not make the loan current within the 90 days.
Foreclosure Sets in
If the loan is not caught up on in the 90 days the lender will then send the homeowner a "Notice of Sale," which informs the homeowner that the lender intends to sell their home due to the late payments and loan default. The homeowner can still prevent his home from entering into foreclosure if he catches up on all his outstanding debt, however, because this process is a long one and because so much debt has accumulated in this time span it can be very difficult for a homeowner to pay the thousands, sometimes tens of thousands, of dollars that they are now behind on their mortgage. Once the "Notice of Sale" is received the lender is able to foreclose on and sell the home within 21 days. Unfortunately, due to the high costs of living, sub-prime mortgage industry fall-out and housing bubble burst, many California homeowners found themselves involved in the foreclosure process. According to the California Progress Report, lenders repossessed 80,000 homes and foreclosed on 31,000 homes in California in the fourth quarter of 2007 alone.
The foreclosure process in California is very complex, which is actually favorable for homeowners. If a lender fails to follow all procedures exactly as they are stated, the foreclosure process must start over again. This oftentimes means that a California foreclosure can take anywhere from a few months to two years to complete. Even though the homeowner would have fallen behind on a substantial amount of mortgage payments during that time, it also means that there is substantial time available in which to make his loan current. Fortunately for homeowners, a few new laws were enacted in California to make it easier for homeowners to avoid foreclosure. Some of the laws include lenders contacting homeowners in person or by telephone to discuss other options aside from foreclosure, providing contact information for the homeowner on HUD (Housing and Urban Development) counseling and allowing the homeowner to request a meeting with the lender that must take place 14 days after the lender's initial contact about the late payments.