Despite it being a relatively common occurrence, foreclosure remains a somewhat taboo topic. Except, of course, when it becomes a reality and its execution an inevitability. At this point, facing property repossession becomes one of the most daunting and distressing experiences a homeowner in California may encounter.
However, by enlisting the help of an experienced foreclosure attorney near you and learning more about the different types of this legal act, you will be able to make informed decisions and potentially find a way to resolve the situation to your ultimate benefit.
What are the two types of foreclosure in California?
We have two primary types of foreclosure in California:
- Judicial;
- Non-judicial.
Each has its specific processes and implications, as well as offering different legal avenues to explore, so let’s break them down.
Judicial Foreclosure
This is the less common of the two types. When a lender initiates a judicial foreclosure, they file a lawsuit against the homeowner in order to obtain a court order to sell the property. While the specificities differ from case to case, typically the process goes like this:
The Lawsuit and Court Proceedings
First, the lender must file a complaint in court, which serves as the legal action to commence the foreclosure process. The homeowner then receives a summons and has a limited period to respond. If the homeowner fails to respond or contests the lawsuit without success, the court may grant a judgment in favor of the lender.
Auction and Sale of the Property
Following a court judgment, the property will be sold at a foreclosure auction. The auction is typically conducted by the county sheriff or a trustee appointed by the court. Interested buyers can bid on the property, and if the property is sold, the proceeds are used to repay the outstanding mortgage debt.
Redemption Period and Deficiency Judgment
In some cases, California law allows for a redemption period after the foreclosure sale, during which the homeowner can reclaim the property by paying off the outstanding debt. However, if the foreclosure sale does not generate enough funds to cover the debt, the lender may seek a deficiency judgment against the homeowner for the remaining balance.
Non-Judicial Foreclosure
Here we have the most common type of foreclosure in California, with this route being taken in the vast majority of cases. This process typically occurs when a deed of trust (i.e. mortgage) contains a power of sale clause, which grants the lender the right to initiate foreclosure proceedings without court involvement. The process usually takes the following form:
Notice of Default (NOD)
The foreclosure process starts with the lender issuing a Notice of Default (NOD) to the homeowner. This document formally notifies the homeowner of their default on the mortgage and provides them with a specified period to resolve it.
Notice of Trustee’s Sale (NOTS)
If the homeowner fails to address the default within the specified timeframe, the lender can proceed with issuing a Notice of Trustee’s Sale (NOTS). This notice provides information about the scheduled date, time, and location of the foreclosure auction.
Foreclosure Auction
At the designated date and time, the foreclosure auction takes place, typically conducted by a trustee chosen by the lender. Interested buyers can bid on the property, and the highest bidder becomes the new owner (provided that the auction is successful). The proceeds from the sale are used to repay the mortgage debt and cover associated expenses.
Right of Redemption
In non-judicial foreclosures, homeowners in California do not have a statutory right of redemption, meaning they cannot reclaim the property after the foreclosure sale is completed.
Who’s the most reputable foreclosure attorney near me?
The prospect of facing foreclosure is overwhelming, all by itself. Fortunately, you don’t have to face it alone. Bankruptcy Law Offices of Mark L. Miller is here to provide the legal guidance and support you need to prevail through these trying times.
As specialists and leaders in our field, we have extensive experience and knowledge to help you navigate the complex legal process, protect your rights, explore potential alternatives, and represent your interests with lenders or in a court of law.
Give us a call today or pay us a visit at our offices near historic La Casa de Machado y Stewart, and ensure you have a dedicated legal team that is ready to fight for you and your ultimate well-being.