Understanding the TRUST DEED FORECLOSURE TIMELINE in California
By Frank Verni
When you find yourself in the position of not being able to make your mortgage payments, it is always important to communicate with your bank and try to work something out in order to avoid foreclosure. At the same time, it is also good to know what the foreclosure timeline is in California so you can plan accordingly.
Not making mortgage payments for the first several months does not mean you are in the foreclosure process – you are just late. During these first months, the homeowner will receive letters and many phone calls from the collections department from your bank asking for payments.
At some point after you miss your mortgage payments – anywhere from 90 days to several months – the lender will tell the Trustee to file a Notice of Default (NOD) against you. The foreclosure process will now begin and you will be in Pre-Foreclosure.
The lender can file this notice any time after a missed payment, but generally it is filed after at least 3-4 missed payments. In the current real estate market, because of the current recession, as many as 6 or more months (and sometimes years) have gone by before a notice was filed. This notice now becomes part of the public record. You will receive this notice via regular mail and registered mail. You may also get a notice taped to the door of your property.
After the notice is filed, there will be a 90 day waiting or redemption period, in which time you can bring yourself current or begin negotiating a way to save the home. It is very important to talk to your lender during this period. If you do nothing, the process will just continue.
At the end of the 90th day of being in pre-foreclosure, the trustee can set a sale date for your property by filing a Notice of Sale. The date of the sale will be shown on the notice and will generally be 21-24 days in the future. You will receive this notice via regular mail and registered mail. There will also definately be a notice taped to the front door of your property.
On the date of the sale, which generally occurs at the county courthouse, one of 3 things will happen:
1. The sale date will be postponed because the homeowner is attempting to work out something with the lender through a forbearance agreement, loan modification, short sale, or personal bankruptcy filed.
2. The property will be sold to the highest bidder above the opening price to cover the amount owed to the lender that is foreclosing. The winning bidder will then own the property and arrange for eviction.
3. If no one buys the home, the property ownership is transferred to the bank and becomes an REO (Real Estate Owned). When the property becomes a REO, the bank will typically assign a licensed real estate agent to contact the homeowner and arrange eviction.
Time is not on your side!!
If you do nothing, a foreclosure will certainly occur. The banks are catching up with their files and are beginning the foreclosure process more quickly these days. They are not allowing the process to go on any longer than necessary as it has occurred over the last few years. That means that from the date of your first missed payment, you could be foreclosed on in approximately 8 – 10 months.
Taking action to protect your rights and negotiating with your lender is a process that you must begin as soon as possible.