Updated: Mar 22, 2020
Facing foreclosure in the Bay Area is serious business. With the price of housing, taxes, and the cost of living, in general, skyrocketing throughout the nine-county region, many more homeowners are looking down the barrel of foreclosure.
In this in-depth article, we will discuss:
What Foreclosure is
The foreclosure process
And what homeowners can do to stop foreclosure
Although foreclosure is a stressful and potentially scary process, there are things homeowners can do to prevent it.
What Is Foreclosure
Put simply, foreclosure is the process of a lender, typically a bank, repossessing a property they have originated a loan on.
This foreclosure process is initiated when a homeowner falls behind on their mortgage payments, which causes the loan to enter default status.
In California, properties typically follow the below process once their loans enter default.
The Foreclosure Process In California
Foreclosure Avoidance Assessment
The very first thing a lender will do is contact the homeowner to conduct a foreclosure avoidance assessment.
Everyone who’s a part of the mortgage note, the borrower and co-signers, will all be contacted to take part in this assessment.
Homeowners have at least 30 days after the lender makes initial contact before they can start foreclosure proceedings.
Notice of Default Served
The second thing a lender will do is send out a notice of default, otherwise known as a NOD.
Notices of Default in California are sent out after the mortgage has not been paid for 90 days.
Why 90 days?
First, lenders will typically wait for two missed mortgage payments or 60 days.
After 60 days of missed payments, a lender will move onto the next step, which is sending a notice of intent to inform the homeowner foreclosure proceedings are on the horizon.
The notice of intent lasts for 30 days, and this 30 day period is required by California law before a lender can publicly file a notice of default.
After the total 90 day period is up, the lender can legally move forward with filing a public notice of default.
It’s at this time that everyone can review the foreclosure information attached to the property online, or directly via the local court‘s records.
Notice of Trustee Sale
The next step in the foreclosure process is filing and scheduling the notice of sale. Lenders can schedule a sale at least 90 days after the notice of default is recorded.
Once the notice of sale is recorded, the lender has the right to sell the house at auction in as little as 21 days.