Note: "These are minimum timeframes as prescribed by law. Typically, lenders and/or servicing companies do not file on the earliest legal date". For example, most lenders will not file a notice of default until the borrower has missed 3 payments. This extends the notice of default period by 30 to 60 days. In addition, California law (Cal. Civ. Code § 2923.5.) requires that lenders contact the borrowers at risk of foreclosure prior to initiating the foreclosure process by phone or in person to assess the borrower's financial situation and explore options for avoiding foreclosure. The lender must notify the borrower of the right to meet with the lender within 14 days. The lender must also give the borrower the toll-free number for finding a HUD-certified housing counseling agency.
Pre-Foreclosure Period
A lender may initiate the foreclosure process when a borrower defaults on a loan, such as by missing a mortgage payment. However, a slight delay may not justify acceleration and foreclosure by the lender. Hence, in practice, lenders generally wait a few months after a missed payment before starting the foreclosure process.
Day 31: Filing of Notice of Default
For owner-occupied loans from 2003 to 2007, the lender may file a notice of default 30 days after contacting the borrower to explore options for avoiding foreclosure. The notice of default must be filed in the county where the property is located and a copy must be mailed within 10 business days after recordation to the borrower and all other persons who have requested such notice. The notice of default informs the borrower of the default. It must also include the lender's declaration that it has contacted the borrower to explore options for avoiding foreclosure, tried with due diligence to contact the borrower, or the borrower has surrendered the property.
Three months after the filing of the notice of default, the lender may record a notice of trustee's sale setting forth the date, time, and place of the upcoming trustee's sale. Because of the gravity of a notice of trustee's sale, it must be widely disseminated. The notice of trustee's sale must be recorded, posted, mailed to the borrower and others, as well as published once a week for three consecutive weeks in a newspaper of general circulation.
Up to five business days before the trustee's sale, the borrower may reinstate the loan by curing the default or paying the missed payments plus allowable costs. After the reinstatement period expires, the borrower still has the right to redeem the property by paying the entire debt, plus interest and costs (not just the arrearage), before the bidding begins at the trustee's sale.
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Portions of this web page is material taken from 2008, CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.). C.A.R. Legal Department.
