Foreclosure FAQs

Frequently asked questions about Non-Judicial Foreclosure in California

Because foreclosure is a legal action, you should seek professional advice if you are in any phase of foreclosure. We are real estate professionals and are providing this rough outline of what happens as a practical matter to give homeowners some idea of what to expect during and after the foreclosure process. For specific details, seek legal advice.

What is non-judicial foreclosure?

Non-judicial foreclosure is a legal process most commonly used when a home is foreclosed on in California. It is less expensive and faster than judicial foreclosure. In a non-judicial foreclosure, the lender files a court action against the homeowner when the homeowner is delinquent in making their loan payments.

The first step in the foreclosure process is the filing of the Notice of Default (NOD). NOTE: Although different lenders take this legal action at different times, when you are delinquent at least 30 days on your loan payment, the lender can take legal action against you by filing a NOD against you. These days, a lender typically waits until you are at least 90 days delinquent on your loan payment to take legal action.

Once a Notice of Default (NOD) has been filed, the home is considered to be in foreclosure. NOTE: If you have missed at least one loan payment, you are considered to be in pre-foreclosure and your loan is delinquent.

How will I know if the lender has taken legal action against me?

The Notice of Default is a legal document that is filed with the court and the court typically mails you a copy of the document. Also at this time, many real estate agents and legal professionals will begin contacting you offering their assistance because the NOD is a matter of public record.

How long does the Notice of Default last?

The NOD lasts as long as the lender wants it to. Once the NOD is at least 90 days old, the lender can file a Notice of Trustee Sale (NTS) which means an actual date is set with the court for the lender to sell the home. NOTE: The lender does not have to file a Notice of Trustee Sale at any specific time.

How will I know if the Notice of Trustee Sale has been filed?

The court will typically mail a copy of the NTS document to you. The lender will often send it to you as well, possibly posting it on the outside of our home because they want to be 100% certain that you have every opportunity to bring the loan current before they take the home back from you through the process of foreclosure for non-payment.

How long does the Notice of Trustee (NTS) last?

The notice must be placed in a news publication for at least 3 consecutive weeks (21 days) for all to see. After that occurs, the sale happens on the court house steps on the date listed on the NTS.

When the price the bank wants is above market, the bank typically takes the home back through the process of foreclosure. Once this occurs, the homeowner is no longer the owner of the home because the bank owns the home now. NOTE: The lender can delay the trustee sale indefinitely if they choose to. This typically happens when a short sale or loan modification is in process with the lender.

Can someone come and change the locks on my home during the foreclosure process?

No. Until the lender takes the house back through the legal process of foreclosure, the homeowner still owns the home and retains all of the rights that homeownership allows. This means that any time during the foreclosure process, the homeowner can take action and make decisions about the home.

Once the bank owns the home, they will assign a real estate agent to list the home for sale.

How will I know if the bank owns my home?

The fastest way is for the homeowner to know if they are still the owner of the home is to either check the public record or to ask a trusted real estate professional who tracks foreclosure activity. If you don’t do that, often the first notice you get that the bank owns the home is when the real estate agent shows up and tells you the bank now owns the home. They should have some documentation they can show you validating their involvement with the home. NOTE: There is NO mailing that comes to you telling you the bank now owns the home.

Once the bank owns the home, what can I expect?

The listing agent will attempt to find out if the home is vacant or occupied. If it is occupied, they will typically offer some type of relocation assistance to help with a move. If they can clearly see the home is vacant, they will meet a locksmith at the home and the locks will be changed. If they cannot tell if the home is vacant or empty, they will typically post or mail some type of notice to get you to call them.

If the agent does offer relocation assistance, the homeowner will be required to leave the home vacant and broom clean by a certain agreed upon date. The agent will meet you at the home at a scheduled time to inspect the home and then if the home is in the agreed upon condition, the agent will give you the check. When the home is not in the agreed upon condition, the agent will typically not be able to give the previous homeowner the check. NOTE: If there is more than one person living in the home, the funds may have to be divided in which case separate checks will be issued. Each person receiving a check will need to sign a 1099 form in order to get the funds because relocation funds are taxable income.

If the previous homeowner does not agree to the required terms to obtain relocation assistance, then the lender will commence with eviction proceedings. If the previous homeowner does not move during the eviction process, the sheriff will eventually lock the previous homeowner out of the home. There will be multiple notices given to the previous homeowner and/or posted to the home alerting the previous homeowner of what is happening. If there is personal property in the home at the time the locks are changed, the previous homeowner will typically have 17 days to make arrangements with the listing agent to retrieve their items.

For most people, foreclosure is not the best answer. Contact us today to schedule your free phone consultation so we can discuss your specific situation. Then you can decide with the facts if you want to do what you can to avoid foreclosure.

Please contact us or call 916-939-2040

Smith Real Estate Services, Inc.is a real estate brokerage company in California (DRE 01381095 and 00676207). We do our best to provide you with current and accurate information. However, we are not attorneys or accountants. Please consult with your attorney or CPA for further information and how this information may affect you personally. Visit our Resources for a list of professionals who specialize in helping distressed homeowners. This was written in October 2011.