If you are facing foreclosure in California, it’s important to understand some of the basics, including:
- the most common type of foreclosure procedure (judicial v. nonjudicial) used in California
- how much time you have to respond
- your rights and protections in the process, and
- what happens afterwards (for example, whether you’ll be liable for a deficiency judgment).
Below we have outlined some of the most important features of California foreclosure law. Keep in mind that this is just a summary; we’ve included statute citations so you can get more details from the laws themselves. And be sure to check out Nolo’s extensive Foreclosure section, where you can find information about all aspects of foreclosure, definitions of foreclosure terms (like redemption and reinstatement), and options to avoid foreclosure.
|Common type of foreclosure process||Nonjudicial: under power of sale in deed of trust|
|Time to respond||For mortgages written between January 1, 2003 and December 31, 2008, lender must personally contact homeowner 30 days before sending notice of default (Cal Civ Code 2923.5). All homeowners get a 90-day notice of default and a 20-day notice of sale.|
|Reinstatement of loan before sale||Allowed up to five days before the sale date|
|Redemption after sale||None if deficiency judgment is waived or prohibited|
|Special protections for foreclosures involving high-cost mortgages||Cal. Fin. Code § 4973 makes a number of abusive loan practices unlawful. Section 4978 provides remedies that include authority for a judge to reform the loan to comply with the law. These provisions don’t apply to mortgages held by the secondary market (Fannie Mae, Freddie Mac) or to assignees who have no reason to know of the loan origination violations.|
|Special state protections for service members||Cal. Mil. & Vet. Code §§ 400 to 409.13|
|Deficiency judgments||Not allowed in nonjudicial foreclosures|
|Cash exempted in bankruptcy||Up to about $22,000 under California exemption System 2|
|Notice to leave after the house is sold||New owner must give former homeowner 3-day Notice to Quit (leave) and file an unlawful detainer lawsuit to evict.|
|Foreclosure statutes||Cal. Civ. Code §§ 2923.5, 2924 to 2924I|
A new law providing more protections to California homeowners in foreclosure, the Homeowners Bill of Rights, will go into effect on January 1, 2013. To learn more see California Foreclosure Protection: The Homeowner Bill of Rights.