What are the General Stages of the California Foreclosure Process?

As California foreclosures arise, more and more investors are looking for foreclosure data and education. Learning the general stages of the California Foreclosure Process is one of the first steps you need to take to begin your journey into this very profitable arena. The six stages of the California foreclosure process are; Payment Default, California Notice of Default, California Notice of Trustee’s Sale, California Auction, Property Sold, Trustee’s Deed Upon Sale.

Step 1: Payment Default

The debtor is financially unable or unwilling to meet the legal obligation to repay a loan, as set forth in the mortgage security instrument(s). In short, the debtor stops making mortgage payments. Typically, the bank will begin the California foreclosure process 120 days after the debtor’s last mortgage payment (though this may vary between banks).

Step 2: California Notice of Default

The creditor takes the first step in the California foreclosure process: an NOD is served on the debtor and is recorded at the County Recorder’s Office. With this action, the creditor is demanding payment and the debtor has ninety (90) days in which to reinstate the loan. This is considered the reinstatement period. At this point, the debtor is vulnerable and may be looking for a way out of the mortgage. Many sites on the internet provide California Foreclosure Data, which includes the NOD. One of these sites is www.foreclosuretrackers.com

Step 3: California Notice of Trustee’s Sale

If the loan is not reinstated within ninety (90) days of the date of the NOD, the trustee will initiate property auction proceedings by issuing a Notice of Trustee’s Sale, announcing the place, date and time of auction in California. This document is posted on the property in a public place and published in a newspaper once per week for three consecutive weeks.

The lender is granted permission to sell the home at public auction.

Step 4: California Auction

At this stage, the property is put up for public auction at the county courthouse and sold to the highest bidder. If nobody purchases the property at the California auction, the property automatically reverts back to the beneficiary of the mortgage as an REO (Real Estate Owned), also known as a Bank Owned property. This definition does not apply to private auctions.

The public auction’s date, time and location are disclosed on the NTS, posted on the property and in a public place.

Step 5: Property Sold

The property is sold to the highest bidder. In instances where there are no bidders, the bank retains ownership (commonly referred to as an REO or Bank Owned property).

Step 6: Trustee’s Deed Upon Sale

If the property reverts back to the bank as an REO, it will be listed on the Multiple Listing Service (MLS) as a bank-owned property. A Trustee’s Deed Upon Sale transfers ownership to the highest bidder at auction or to the bank that retained ownership.