1/04/2010

Foreclosure Timeline in California

If your loan was obtained between 2003 and 2007, and you meet certain other guidelines, your timeline (for a non-judicial foreclosure, the most common in California) from the first day of the pre-foreclosure period up through the Notice of Sale, will be about 152 days.

The Notice of Default may be filed 30 days after the lender contacts the borrower to explore options avoiding foreclosure for the borrower.

Three months after the NOD is filed, the Notice of Trustee's Sale may be recorded and then published over a period of 3 weeks. The borrower has 5 days prior to the sale to cure the default, which means catching up on the entire debt, and all other interests and costs. On Day 152 of this timeline, the lender may sell the property to the highest bidder at public auction.

If the seller is contemplating selling, there is a minimum of 4 months at the time the NOD has been filed. Since many sellers are in a short sale position and would need to list their property, find an eligible buyer, submit their entire financial package to the lender and obtain the lender's approval, 4 months is not enough time since the standard bank approval time is still around 90 days.

If the homeowner is experiencing financial distress and is now starting to not pay the mortgage, they need to immediately recognize their situation and allow for 6 to 8 months in which to get their property listed and sold, if that is to be the course of action. Most people do not want to sell, and make the mistake of hanging on too long until they lose the house through foreclosure. This is usually the worst course of events from which it takes longer to recover in terms of credit eligibility and future mortgage eligibility. Credit is checked for rental applications, insurance, and employment, so the distressed homeowner may be affected in many other ways.

If an owner is in bankruptcy, or has surrendered the property, the initial 30-day notice requirement does not apply.

For other owners not in the 2003-2007 loan origination period, the original foreclosure timeline applies, which is about 121 days total.

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