Legal Question in Real Estate Law in California

Re: foreclosure

A lender can commence foreclosure as soon as one payment is missed, or where no pyaments are missed but the borrower has failed to pay real estate taxes on the property, as well as for the failure of the borrower to insure the property, and even when the borrower is current on the lender's loan but has defaulted on a loan which is "senior" to that lender's loan. Customarily, where the foreclosure is for non-payment of the loan payment, the lender will wait until two payments have gone unpaid, but he need not wait.

Once begun, a non-judicial foreclosure, or "trustee's sale" of the property can be completed in just under four (4) months, and is commenced by the recordation of a Notice of Default in the Recorder's office of the county where the property is located.

Re: foreclosure

First, it makes a difference whether the financing is a note secured by a deed of trust or a conventional mortgage. Since note/DofT loans are by far the more common in California, I will discuss that process.

A D/T foreclosure goes through two phases. First you are given a Notice of Default. Not sooner than three months thereafter, you would get a Notice of Trustee's Sale. Theoretically a trustee's sale can take place 21 days after notice, so the total period is 3 months and 21 days at minimum. Note that the three-month period can be 90, 91 or 92 days depending on the month in which the default notice is filed, so the total process can be anywhere from 111 to 113 calendar days when rushed. In practice, they usually take a little longer, but don't count on it.

When can the process begin? Again theoretically, a lender can serve you with a Notice of Default the day after your payment is due, but this almost never happens except in cheap novels about evil mortgage men because 99.95% of one-day-late "defaults" are cured. Most commercial lenders will wait around two months before issuing a notice of default, but in the meanwhile of course you will have received late notices and probably some telephone inquiries (usually). You will also be billed for late charges.

Lenders might initiate foreclosure proceedings earlier (i.e. after a couple weeks' tardiness) if they felt very uncomfortable with the borrower and the loan, i.e. there was no insurance or they thought the occupants were not taking care of the property, which is of course the lender's collateral.

There are several pretty good self-help law books on how to deal with foreclosure. You might even be able to find one at the library.