The Foreclosure Process – State of California
Notice of Default: Upon receipt of the Redemption: There is a 90 day redemption
foreclosure referral package, the Notice of Default period that must run from when the NOD is
(NOD) is prepared and forwarded to the title recorded. Upon expiration of the 90 day waiting
company for recording along with the executed period; the sale, publication and posting dates will
Declaration from the lender. Recording of the NOD be set.
constitutes ‘first legal' when recorded. Once
recorded, a copy of the NOD and Declaration will The only post-sale right of redemption occurs when
be mailed to all parties to the Deed of Trust and an IRS tax lien is recorded against the property.
parties having recorded a request for notice. Once the sale is held, the lien is extinguished, but
the IRS retains a 120-day right of redemption.
Trustee Sale Guarantee: A Trustee Sale During this time frame, the IRS has the right to
Guarantee will be ordered from the title company purchase the property for the amount of the
and reviewed upon receipt that will disclose all successful bid plus interest.
parties entitled to notice, as well as any other
encumbrances recorded against the Deed of Trust Conveyance & Final Title: After the
and reviewed for any possible defects which may foreclosure sale is conducted, a Trustee's Deed
exist that would prevent continuation of foreclosure. Upon Sale is issued. If the property reverts to the
The one-month mailing notices are sent to any beneficiary, it is sent for recording within a few
parties requiring notice. days of the sale, If a third-party purchases the
property, the unrecorded Trustee's Deed will be sent
Notice of Sale: A Notice of Sale (NOS) will be to the address specified by that party.
recorded in the appropriate county and all parties
requiring notice will be sent certified and regular Reinstatement and Payoff: The trustors,
mailings of the upcoming foreclosure sale date. The owners and junior lien holders have a statutory right
NOS will be published for three successive weeks to reinstate the loan up to five business days prior to
in a newspaper of general circulation for the city the sale. The beneficiary may waive the five-day
and county the property is located. A copy of the limit and accept reinstatement at any time prior to
NOS will be posted on the property itself and the sale. Reinstatement must be tendered in the
recorded in the county recorder's office. The sale amount of all sums due the lender plus all
will be conducted at the time and place set forth on foreclosure fees, costs and any attorney's fees and
the NOS. costs incurred. The lender may accept partial
reinstatement during the foreclosure proceedings
Bidding Instructions: Bidding instructions will without the need to cancel the foreclosure if the
be requested from the client and should be balance is not received. The party tendering the
submitted before the scheduled sale date. If there are partial reinstatement must be notified that it is
no competitive bidders, the interest of the property accepted as a partial reinstatement and that the
will revert to the beneficiary (the bank). Third party foreclosure will be resumed if the balance of funds
bidders must outbid the beneficiary to obtain the is not received within the agreed period of time. It
property, and the sale proceeds are distributed in the is advisable to enter into formal written forbearance
order of priority, with the beneficiary being satisfied agreements, which are executed by both the lender
first. and the party seeking to reinstate the loan. This will
avoid any misunderstandings regarding the
Sale: The sale may be postponed pursuant to the foreclosure.
client's instructions without an additional
publication. The sale may be postponed up to a
maximum of 365 days after the original sale date.
After that a new publication will have to be set with
a new sale date, mailings, etc.