Unfortunately, foreclosure continues happening in large numbers all over the country, including here in Orange County, California. The vast majority of foreclosures are the result of homeowners falling behind on their mortgage payments.
Other reasons for foreclosure may include job loss, divorce, or medical bills. Whatever the reason, you should know how the foreclosure process works in California, so you stay prepared if you are at risk of foreclosure. This article will give you a brief overview of this process in California.
Day 1, Missed Payment
The first thing that happens when you miss a payment on your mortgage is that the lender will send you a notice called a breach letter. This letter will state that you have missed a payment and that you have a certain number of days to make that payment before the foreclosure process begins. Typically, you will have about 30 days to make the payment.
If you can make the payment within that time frame, the foreclosure process stops, and you can return to making your regular payments. However, if you cannot make the payment, the foreclosure process will begin. It is easy to get behind on your mortgage payments, but catching up makes a positive impact.
Day 120, Notice Of Default
If you cannot make that initial payment within 30 days, then the lender will send you a notice of default. This notice will state that you have failed to make your payments and that the foreclosure process will begin in 10 days. The message will also contain information on avoiding foreclosure, like refinancing or selling the property.
By law, the lender has to wait 120 days from the missed payment before they can file for foreclosure. It is important to note that, even if you receive a notice of default, you do not have to move out of your home immediately. In fact, you can stay in your home until the foreclosure process is complete, which can take several months.
If you are already behind on payments or have received a Notice of Default, it may help to compare your options before the timeline gets harder to manage. For homeowners who want to avoid a long listing process, we put together a dedicated guide on how to stop foreclosure in Orange County CA and sell your house fast with a direct cash offer.
Day 180, Notice of Trustee Sale
Once you receive a notice of default, you will have 90 days to try and catch up on your payments. If you are still unable to make the payments, the lender will file a notice of trustee sale, which is the next step in the foreclosure process.
The notice will state that your home will be part of the housing market at a public auction. They will post the sale date on the property and publish it in a local newspaper. At this point, it may be difficult to stop the foreclosure, but you can still try to work something out with the lender, like a loan modification.
Day 200, Auction
The next step is the auction setup, which will happen 20 days after they post the notice of trustee. However, they can postpone the auction if they want to. To do so, they will have to post a new statement with a new date and time. The auction is open to the housing market, and the highest bidder will get the property.
Non Judicial Foreclosures in California
In California, most foreclosures are nonjudicial, meaning the lender does not have to go to court to foreclose on the property. In other words, foreclosure can happen without you even going to court. You may still have to pay any fees associated with the foreclosure, but you will not have to go through the legal process.
In the case that you owe a second mortgage or home equity line of credit, then the foreclosure process may be different. If someone buys the property at the auction for less than what you owe on the first mortgage, then the second lender can file a deficiency judgment against you. This means that you will still owe them money even after the foreclosure.
Judicial Foreclosures in California
Although most foreclosures in California are nonjudicial, there are some cases where a judicial foreclosure may be necessary. It usually happens if the property is worth less than what you owe on the mortgage. In this case, the lender will have to go through the court system to foreclose on the property.
For example, if you have a $200,000 mortgage and the property is only worth $150,000, then you will owe the lender $50,000 after the foreclosure.
Need to Sell Before Foreclosure Moves Further?
If you are behind on payments and want to avoid waiting on repairs, showings, or buyer financing, OC Home Buyers can help you review a direct cash offer. We buy houses in Orange County as is, including homes facing foreclosure, properties with repairs, and situations where timing matters.
Learn more about your options here: sell your house in foreclosure in Orange County CA, or request an offer at /get-offer/.
