California Foreclosure Law Changes

California Foreclosure Law Changes

In June of this year, California foreclosure law was re-written by the Democratic Senator from San Leandro, Ellen Corbett. The new law mandates that lenders in the state notify the delinquent owner at the minimum 30 days before beginning the foreclosure course of action. It also requires a lender who has not tried prior to this notification to work with their delinquent accounts in an attempt to change the terms of the mortgage to to comply with a 90 day moratorium on the foreclosure course of action while they do so.

Proponents and naysayers alike have chimed in on this aspect of the new law. Some say it is not constructive in that it allows the negligent owner to keep in the home without payment for 3 months. Others say this it is a positive change because it gives the homeowner some leeway in finding their way out of the enforced sale.

Delinquent payers have up to five days before the schedule sale to reinstate the character back to them. This includes, of course, paying all noticeable debt in addition as legal costs and penalties that have accrued.

If a strength of sale exists in the original mortgage, the sale goes by a non-judicial foreclosure course of action. If, however, no notice of sale is present, the lender must file a lawsuit in order to acquire a court order to foreclose, and the sale then goes by a judicial foreclosure. A judicial foreclosure allows the borrower to redeem the character up to 12 months after the sale. You can see why, then, that the non-judicial foreclosure is the means of preference for most California lenders.

the time of action and time-line for California foreclosure is clear: Notice of Default is filed with the county recorder and sent to borrower within 10 business days and then again within that first month of filing. After 3 months, a Trustee sale date is set. The month prior to sale is important as 25 days before, notice is sent to the IRS (if appropriate), 14 days before sale, the Notice of Trustee sale is recorded. The borrow can reinstate the character to themselves up to 5 days before the sale, and on sale date, the character goes to the highest bidder.

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