California and San Diego Foreclosure Timeline
Learn about the Foreclosure Timeline and What the Key Dates are.
The anatomy of a foreclosure is fairly straightforward. In California, it’s typically a non-judicial procedure that usually takes just under four months from the filing of a Notice of Default - unless a lender is willing to negotiate and extend deadlines.
The lender can record a Notice of Default, the first step in the foreclosure process, as soon as the loan is two months delinquent.
When homeowners first get behind in payments is when real estate agents can be most effective by quickly listing the home for sale.
The steps are:
1. Payment Delinquency - 2 months
Current owner must be at least two months behind on the mortgage (1st or 2nd) before the lender can record a Notice of Default (NOD). It will not always be exactly two months from when you become delinquent on your mortgage, but the lender may begin the foreclosure process by directing the Trustee to record an NOD at any time from this point forward.
2. Notice of Default (NOD) – 3 months
After several months of missed payments, the beneficiary (lender) will notify the borrowers that they’re in default and direct the trustee (the entity that conducts the foreclosure process) to start foreclosure proceedings. A notice of default is recorded in the office of the county recorder in which a property is located. Once a notice of default has been recorded, the property is officially a "residence in foreclosure."
3. Recording of a Notice of Trustee’s Sale – 20 days
If homeowners can’t work with a lender to reinstate the loan - pay back payments, fees and penalties - the trustee, after three months have passed since the Notice of Default has been recorded, schedules the trustee’s sale and records a Notice of Trustee’s Sale. The Notice of Trustee's Sale is posted on the property, published in a publication of general circulation and mailed to the borrower.
In total, the minimum period from initial default until the property has been foreclosed upon and title transferred to lender or bidder at auction is five months and 20 days
4. Trustee’s Sale
The property is sold to the highest bidder, who gains title to the property with a Trustee’s Deed. Buyers are often required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand. If there are no bidders or no bids high enough to satisfy the lender, the property goes back to the foreclosing lender and becomes an REO (real estate owned by a bank).
NOTES:
- Borrower has the right to reinstate the loan up to five (5) days prior to the Trustee Sale date.
- The Internal Revenue Service (IRS) has up to 120 days after the Foreclosure sale to redeem the property.
- Upon the issuance of a Trustee Deed, junior mortgages are generally extinguished
- If a junior lean holder is foreclosing, the lender or acquirer through auctions receives a Trustee Deed and holds title subject to the senior lien(s).
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