Non-judicial foreclosures are when a lender forces the sale of a home to cover a debt. Non-judicial means they can do this without going to court. But, the lender still must take many steps required by law before they can foreclose.
California's Homeowner Bill of Rights: This law protects homeowners facing foreclosure based on mortgage debt. The Homeowner Bill of Rights has many protections including:
A homeowner can sue if the lender violates these laws. Federal laws also protect homeowners during a foreclosure.
Usually, before the foreclosure process starts, the lender sends many letters demanding payment. If they want to start foreclosure, they'll need to follow the steps and timeline below.
They must also tell you that you have a right to ask for another meeting to talk about how to avoid foreclosure. If you ask for you, they must schedule it to take place within 14 days.
This is your chance to try to work out a plan to avoid foreclosure. If you want, you can authorize a lawyer, HUD-certified housing counseling agency, or another advisor to talk on your behalf with the lender. You cannot be forced to accept any plan that your representative and the lender come up with during that discussion.
Thirty days after contacting you, if you and the lender have not worked out a plan to avoid foreclosure, the lender can record a Notice of Default in the county where your home is located. Recording a Notice of Default marks the start of the formal and public foreclosure process. The lender sends you a copy of this notice by certified mail within 10 business days of recording it. You have 90 days from the date that the Notice of Default is recorded to “cure” (fix, usually by paying what is owed) the default. You can use this time to try to negotiate a loan modification or repayment plan.
Fraudulent companies can search the public records to send defaulted borrowers offers to “help." These fraudulent companies could take your money and then do nothing to help. A housing counselor, approved by the U.S. Department of Housing and Urban Development (HUD), may be able to help you for free.
The Notice must have:
If no one else bids, your home goes to the lender. The successful bidder gets a trustee's deed once the sale is complete.
You have the the right to can stop the process by paying off the loan at least 5 days before the sale. Learn more
You have up until 5 days before the foreclosure sale to stop the process. This is called “reinstatement” of the loan. During the 21-day period after the Notice of Sale is recorded, any person or institution (like a bank) with an interest in your home has the right to redeem the home up until the nonjudicial foreclosure sale/auction. This means that they must pay the entire loan in full.
Whoever buys your home can't just change the locks. The new owner must serve you with a 3-day written notice to quit (move out). If you don't move out in the 3 days, they must go through the formal eviction process in court in order to get possession of the home. That process typically takes several weeks. If your home was foreclosed on by your HOA, you have more time to regain your home. You have 90 days after the foreclosure sale to pay off any amount owed to regain ownership. If your home sells for more than you owed on the home, you're entitled to the "surplus" funds. The process to get those funds is simple.
How to get the surplus funds. Learn moreHow to get surplus funds
Let the company that sold your home know your updated address when you move. That company is the Trustee listed on the Notice of Sale. Give them your address so they can let you know about any surplus so you can request it.
If the Trustee is not sure who should get the surplus funds, the Trustee must deposit the funds with the local Superior Court and give notice of where the funds are. Claiming your funds from the court is also simple. Non-profits, like HERA, can explain the process for free.