California Laws on Missed Payments & Foreclosure
Once you miss a single payment on your California home, you are classified as a defaulter. If more than 30 days elapse without a payment, you will no longer be considered current on the loan. After three missed payments, the foreclosure process begins. In California, the entire foreclosure process takes approximately 120 days.
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Judicial Foreclosure
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In a judicial foreclosure, the lender must file a lawsuit against the homeowner to foreclosure on the home. Judicial foreclosures are not common in California. Once you are served the paperwork, you will need to submit a written response to the court where the Notice of Complaint is filed. If you fail to respond, the judge will make a judgment, and the home will be sold through a public auction.
Non-Judicial Foreclosure
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The lender has the authority to foreclosure if a power of sale clause is included in the mortgage deed of trust. In the event of your default, the lender will file a Notice of Default at the county recorder's office. The notice includes the delinquent amount and the date by which the payment must be received. If you fail to make the payment, the lender can sell the home three months from the filing date.
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Foreclosure Sale
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At least 20 days before the sale occurs, the Notice of Sale is posted on the property itself and in one public location. Beginning 20 days prior to the sale, the notice must be published once a week for three consecutive weeks in the local newspaper. The notice contains the date, time and location of the sale, the property address and contact information for the trustee handling the sale. The borrower has up to five business days before the sale to pay the entire delinquent balance and prevent the sale.
Redemption Rights
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The right of redemption provides homeowners the opportunity to purchase back the home after a foreclosure sale. This right is only available if the home was foreclosed judicially. The property can be reclaimed by making a lump-sum payment for the entire balance remaining on the loan plus any associated fees. The redemption period is determined by the sale price. Homeowners typically have one year. If the trustee receives a bid to cover the entire balance left on the loan, the period can be shortened to three months.
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