Foreclosure and Post-Foreclosure Evictions

Occasionally, home mortgage lenders in California find it necessary to foreclose on a home after the owner falls into serious default. Additionally, new owners of foreclosed property may find that the previous owners have failed to vacate by the time they are ready to move in. The foreclosure process can be long and complicated, and smaller lenders and individuals may need outside expertise to successfully complete the process. An Orange County eviction attorney from Schiff & Shelton can guide you through the foreclosure process.

Beginning the Foreclosure Process

California is a “lien theory” state, meaning that home loans automatically act as a lien on property. As opposed to other states, it is not necessary for home lenders in California to obtain a judicial order before beginning the eviction process. The lender will need to take the following steps for a nonjudicial foreclosure before evicting the homeowner:

    1. The lender MUST contact the homeowner and anyone else on the mortgage loan to assess your financial situation and examine the homeowner’s options to avoid foreclosure (called a “foreclosure avoidance assessment”). The lender:
      • Cannot begin the foreclosure process until at least 30 days after contacting the homeowner to make this evaluation; and
      • Must advise the homeowner during that first contact that the homeowner has a right to request another meeting about how to avoid foreclosure. The lender must schedule that meeting to take place within 14 days.
    2. If you, the lender, are unable to work out a plan with the homeowner to avoid foreclosure, you can record a Notice of Default in the county where the home is located. You should record this notice at least 30 days after contacting the homeowner for the foreclosure avoidance assessment. This step begins the formal and public foreclosure process. You also have to send a copy of this notice to the homeowner by certified mail within 10 business days of recording it. The homeowner then has 90 days from the date that the Notice of Default is recorded to “cure,” or fix, the default (usually by paying what is owed).
    3. If the homeowner did not pay the amount owed within the 90-day period, you can then record a Notice of Sale. You must record this notice at least 90 days after the Notice of Default is recorded. The Notice of Sale will say that the trustee will sell the homeowner’s home at auction in 21 days.

The Notice of Sale must:

    • Be sent to the homeowner by certified mail.
    • Be published weekly in a newspaper of general circulation in the county where the home is located for 3 weeks in a row prior to the sale date.
    • Be posted on the homeowner’s property, as well as in a public place, usually at a local courthouse.
    • Have the date, time, and location of the foreclosure sale; the property address; the trustee’s name, address, and phone number; and a statement that the homeowner’s home will be sold at a public auction.
  1. At least 21days after the date when the Notice of Sale is recorded the homeowner’s property can be sold at a public auction. The successful bidder must pay the full amount of the bid immediately with cash or a cashier’s check. The successful bidder will receive a trustee’s deed after the property sale is complete. Usually, the lender bids for the home at the auction for the amount of the balance due plus the foreclosure costs. If no one else bids, the home goes to the lender.
    • Note: Before the foreclosure process begins, you as the lender or loan servicer may send letters for several months demanding payment. If you do, you should know that those letters are NOT considered notices of default.

If you are interested in starting foreclosure proceedings to evict a homeowner, you should contact the experienced Orange County eviction attorneys at the Law Offices of Schiff & Shelton today at (949) 417-2211 to schedule your initial consultation.

Schiff & Shelton, Attorneys at Law
3700 Campus Dr, Suite 202
Newport Beach, CA 92660
(949) 417-2211

The information contained herein is not intended to serve as legal advice and is advertising as defined by the California Business and Professions Code. For your legal needs, you should consult with a qualified attorney.