How Foreclosure Works in California

Both. A deed of trust or mortgage with a power of sale can be foreclosed outside of court by a trustee's sale, after a notice of default and notice of sale. A lender may also foreclose through a court action (judicial foreclosure).

Before recording a notice of default, the servicer generally must contact the borrower (in person or by phone) to assess the borrower's finances and explore options to avoid foreclosure, and then wait 30 days (or 30 days after meeting due-diligence contact requirements). The servicer must give the borrower HUD's toll-free number for finding a housing counseling agency. A notice of default is then recorded with the county recorder. For the sale, a notice of sale must be posted in a public place and on the property (on the door of a single-family home) at least 20 days before the sale, and published once a week for three consecutive calendar weeks, with the first publication at least 20 days before the sale. A separate notice addressed to the "Resident of property subject to foreclosure sale" must be posted and mailed to warn occupants.

At least three months must pass after the notice of default is recorded before the notice of sale is given. The notice of sale may be recorded up to 5 days before the three months end, but only if the sale date is at least three months and 20 days after the notice of default was recorded. The notice of sale must be posted and first published at least 20 days before the sale.

Yes. A borrower may reinstate a loan in monetary default by paying the past-due amounts plus permitted costs and fees at any time from the recording of the notice of default until five business days before the sale date set in the first recorded notice of sale. The required notice of default must tell the borrower about this right.