The foreclosure process in California can be a daunting subject to those who are already troubled by an uncertain economy in today’s recession. As many people struggle to find or keep their employment, paying on the mortgages for their houses has become more difficult than ever before. It is important to know very basic, but vital information about foreclosures if you are a resident of California, in order to protect yourself from losing one of your most valuable assets.

Foreclosure services are offered in the state of California to assist homeowners in financial hardship. Before going through the extensive foreclosure process, contacting real estate services about the possibility of a short-sale is an option as well. Many times, if a homeowner does not know what to expect, they may overlook a key fact that could protect them in wrongful foreclosure.

What Exactly is the Foreclosure Process in California?

The foreclosure process in California can take anywhere from 8-9 months on average, and may or may not go through a judicial foreclosure process. When the lender defaults on their mortgage this is the start of the foreclosure process. The lender is responsible for contacting the homeowner, and many times, when the homeowner does not return the communication, this leads to the next few steps.

The process for foreclosure in California is as follows:

• The homeowner defaults on their mortgage
• The lender sends a Notice of Default to the homeowner
• After 90 days, a Notice of Sale will be published
• After 20 days the property may be placed for auction

There are specific foreclosure laws in California and the process is well documented to protect all parties involved. Once the lender takes over the property to protect the original investment, they have the right to sell the property at auction, contained in the power of sale clause in the deed. If the power of sale clause is not in the deed, the process must go through the judicial process (which is not as common). After ninety days past the Notice of Default, the trustee must publish the notice of the sale publicly, and twenty days later, the home may be sold for the cost of the debt plus foreclosure costs. The homeowner will then have to vacate the premises, their credit will be noted of this for up to seven years, and the money invested into this asset will be lost.

The foreclosure process in California is recorded step by step and therefore there are specific laws in California pertaining to the foreclosure process. The lender must contact whoever is listed on the mortgage loan if there is a default; the lender cannot start the foreclosure process until thirty days after the initial contact options are explored. After ninety days, the lender must serve the homeowner with a Notice of Sale. The County Clerk’s office will have all of the information on record, and you will be notified by the proper eviction process if it comes to those terms.

Short Sale vs. Foreclosure: Proaction and Reaction

The short sale process is for those who owe more on their property than the total value of their property, but they are in need to sell on the real estate market. A short sale works with a lender so the homeowner pays a pay-off rate, rather than the complete difference. It is not required for a home to be in foreclosure for a home to be up for a short-sale, and many times, it is one way for a homeowner to avoid the extensive foreclosure process. The homeowner must be in financial hardship and have proof to support this claim.

What if it’s a Mistake?

Knowing the foreclosure process in California is important if you are a homeowner, because in case of wrongful foreclosure, a homeowner’s property can be tied up in the courts for an extended period of time. Many times, a homeowner may not have defaulted on their mortgage at all, but errors in the lender’s records show otherwise. What is a homeowner to do then? Having active communication with the lender is key, and responding to any letters sent by the lender is imperative. What happens to the owner if a wrongful foreclosure occurs? It can ruin their credit and can lead to the loss of their property.

When you take on the responsibility of becoming a homeowner, it is important that you are certain of the terms and conditions set by the lender when dealing with foreclosures. If tough financial times are looming, you may want to investigate options such as a short-sale to avoid further damage to your credit. The changing dynamics of the economy and uncertainty of the housing market are important factors to consider when evaluating the foreclosure process in California and its impacts on its residents.