How foreclosure works in California

The notices you will receive in California, in order

1. Contact from your servicer about your options

   From your mortgage servicer, at least 30 days before a Notice of Default can be recorded

   For a first mortgage on a home you live in (1 to 4 units), the servicer must reach you by phone or in person, or show it tried by letter, phone calls and certified mail. It must review your finances with you and tell you that you can ask for a follow-up meeting within 14 days. Take the call and ask what options you can apply for.

   Cal. Civ. Code §§ 2923.5, 2923.55

2. Notice of Default

   Recorded in your county by the trustee or lender; mailed to you by certified or registered mail within 10 business days after recording

   This starts the formal foreclosure. It begins with the words IMPORTANT NOTICE and tells you that you may have the right to bring your account current. It comes with a summary sheet in several languages. Note the recording date, because the 3-month clock runs from it.

   Cal. Civ. Code §§ 2924, 2924b, 2924c, 2923.3

3. Letter about foreclosure prevention options

   From larger servicers, within 5 business days after the Notice of Default is recorded

   The letter must say that you can be reviewed for options to avoid foreclosure, whether you need to apply, and how to get the application. If you apply, the servicer must confirm in writing within 5 business days what it received and what is missing.

   Cal. Civ. Code §§ 2924.9, 2924.10

4. Certification on a second mortgage

   Sent by certified mail with the Notice of Default, only when a second or other junior mortgage is foreclosing

   The servicer must record and send you a sworn statement about whether it did things the law calls unlawful, such as sending you nothing in writing for 3 years. The notice with it must tell you that you can ask a court for relief before the sale.

   Cal. Civ. Code § 2924.13

5. Notice of Sale

   From the trustee, no sooner than about 3 months after the Notice of Default; mailed by certified or registered mail and posted on your door at least 20 days before the sale

   It gives the date, time and place of the trustee's sale and the trustee's name and phone number. It is also recorded, posted in a public place and published in a newspaper for 3 weeks. It includes a phone number or website and a file number you can use to check whether the sale has been postponed.

   Cal. Civ. Code §§ 2924, 2924b, 2924f

6. Notice of a postponed sale

   From the lender or its agent, within 5 business days after a sale is postponed by at least 10 business days

   On a first mortgage for a home you live in, you must get written notice of the new sale date and time. Shorter postponements are only announced out loud at the time and place set for the sale.

   Cal. Civ. Code §§ 2924(a)(5), 2924g(d)

7. 3-day Notice to Quit, then a Summons and Complaint

   From the new owner, after the trustee sale

   A former owner must get a written 3-day notice to quit before any eviction case. If you stay, the new owner can file an unlawful detainer (eviction) case, and you are served with a Summons and Complaint that you must answer on a short deadline.

   Cal. Code Civ. Proc. §§ 1161a, 1167

The legal steps in California

1. Missed payments and first contact

   Under a federal rule, your servicer generally cannot start foreclosure until you are more than 120 days behind. For a first mortgage on a home you live in (1 to 4 units), California law also says the servicer must contact you, or try hard to, to talk about your finances and your options. It must then wait 30 days before it records a notice of default. You can ask for a follow-up meeting, which must be set within 14 days.

   12 C.F.R. § 1024.41(f); Cal. Civ. Code §§ 2923.5, 2923.55

2. Notice of default is recorded

   The foreclosure starts formally when a notice of default is recorded in the county where your home is. At least 3 months must pass after that. During this time you can catch up on what you owe (reinstate) or apply to your servicer for a loan modification or other option.

   Cal. Civ. Code §§ 2924, 2924c

3. Notice of sale

   After the 3 months, the trustee can set a sale date. The notice of sale must be recorded, mailed to you by certified or registered mail, posted on the property and in a public place, and first published in a newspaper at least 20 days before the sale. The sale cannot be earlier than 3 months and 20 days after the notice of default was recorded.

   Cal. Civ. Code §§ 2924, 2924b, 2924f

4. Last chances before the sale

   You can reinstate the loan until 5 business days before the sale date. If you get a complete loan modification application to your servicer at least 5 business days before the sale, covered servicers must pause while they review it. If you list the home for sale with a California licensed real estate broker and the trustee receives the listing agreement by certified or tracked mail at least 5 business days before the sale, the sale must be put off 45 days. This can be used only once.

   Cal. Civ. Code §§ 2924c, 2923.6, 2924.18, 2924f(e)

5. Trustee sale (auction)

   The trustee sells the home at a public auction to the highest bidder. For a first mortgage on a home with 1 to 4 units, the trustee cannot sell at the first auction for less than 67 percent of the home's fair market value. If it does not sell, the sale is put off at least 7 days and can then go to the highest bidder. You cannot buy the home back after a trustee sale.

   Cal. Civ. Code §§ 2924f(f), 2924g

6. After the auction: bidding window and leftover money

   For homes with 1 to 4 units, the sale may not be final right away. Tenants who live in the home and certain other eligible bidders can send the trustee a notice of intent to bid within 15 days and a bid within 45 days. If the home sold for more than the debts and costs, the leftover money goes to other lienholders in order and then to you.

   Cal. Civ. Code §§ 2924m, 2924j, 2924k

7. Eviction

   The new owner cannot just change the locks. A former owner must get a written 3-day notice to quit. If you do not move, the new owner has to file an eviction case in court. Tenants renting the home generally get at least 90 days' written notice instead.

   Cal. Code Civ. Proc. §§ 1161a, 1161b

Common questions in California