In California, it takes several months from the first late mortgage payment until the foreclosure may be completed. The absolute minimum time required from the date of recording of the Notice of Default to actual sale is 112 days, but due to common delays, it is extremely rare for it to be completed in less than 6 months from the first late payment.
Since most lenders allow a 15-day grace period after the payment due date, they don’t even think about starting the default process until that payment is 30 days late, but it could begin as early as the day after the grace period has ended. The Notice of Default (“NOD”) is the first step that must be taken. This must be recorded in order to start the process. Additionally, the borrower and any junior lienholders who have filed a “request for notice” must be notified by certified or registered mail. The notice of default must also be published in a newspaper of general circulation once a week for three weeks.
Once the NOD has been recorded, the reinstatement period begins, where the borrower has 90 days to pay all past-due payments, penalties, taxes and interest, along with other costs and fees for the legal and recording expenses. Up until 5 days prior to the Trustee Sale, the borrower may catch up and reinstate the loan to put it in “good standing.” Sometimes, due to special circumstances and at the sole discretion of the lender, the borrower may still be allowed to reinstate the loan after this time period is up.
If the lender chooses to proceed with the foreclosure, a Notice of Trustee Sale (“NOT”) must be recorded, and published in a newspaper of general circulation once a week for 21 days, and also posted on the property and in a public place, such as the city hall.
At the Trustee Sale, anyone may bid on the property, but all bids must be in the form of cash or cashier’s check. The holder of the 1st trust deed will usually bid the total amount that is outstanding. If there are no other bidders who are capable of paying more than that amount, the sale is completed and a trustee’s deed will be issued to the new owner. At that point, the property will now become part of that lender’s REO portfolio, and will be assigned to one of their REO brokers to market it.
If you would like to be notified of foreclosed homes in South Orange County, California, please contact me by sending an email to Foreclosures@VickiLloyd.com to be put on the list for the latest updates.
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