The Non-Judicial Foreclosure
also known as a TRUSTEE'S SALE is the easy and preferred method of
foreclosure in California. It's fast and inexpensive. In a Deed of Trust
the borrower (Trustor) gives the Trustee (typically a title company) the
right to sell the property if the Buyer defaults.
If the borrower is not making
payments and the lender decides to foreclose, the first step is a Notice
of Default. It states the amount in default. 90 days is given to cure
the default by catching up on all late payments, penalties, and costs.
After the 90 days expires, the
lender files a 21 day Notice of Trustee's Sale, at which time an
auction is held, usually at Court, with limited publicity resulting in a
greatly depressed price. After it is over, the former owner must be
evicted if he refuses to leave.
The Borrower can still catch
up on all late payments until 5 business days prior to the sale. Within
the last 5 days, the only way to stop a sale is by payment in full of the
Most lenders prefer NOT to
foreclose. Banks are in the money business, not the real estate business.
They try to avoid foreclosure, because it is bad for their books if their
ratios of REO (real estate owned) and bad debts climb.
By State law there is never
personal liability for a purchase mortgage for a personal residence.
The owner can "walk away" from the property with immunity from
personal liability regardless of the method of foreclosure.
Lenders may not seek a deficiency judgment
after a non-judicial foreclosure sale and the borrower has no rights of
NOTE: Above information is deemed reliable,
but not guaranteed. If you are in foreclosure seek EXPERT advice