Home lenders protected their interest in property with a deed of trust instead of a mortgage. That makes no difference if you’re keeping up your payments; should you fall behind, the lender may guide its deductions to begin foreclosure. With a mortgage, the lender has to go to court to waive; in trust deed conditions, there is no dependence on the court’s participation.
A lender has the right to start foreclosure proceedings the moment you’ve missed the first payment. In practice, the Nolo legal site says , your lender would rather not devote the time, money and lawyers’ fees if it could be avoided, so you might be able to go a few months in default before the foreclosure procedure begins. It might never go any farther, if you can make up the missed payments, plus interest and fees.
In some states, a homeowner might not receive any notification of a non-judicial foreclosure until the purchase is scheduled. In California, according to the Paladin Legal Advocacy Center, your lender should notify you within 10 days of filing a notice of default with the county recorder. The deal can’t be scheduled by the trustee until three months. The trustee must market the sale in the newspapers 20 days in advance, so it will be close to four months from the filing to the foreclosure auction.
Up until five days before the day of the purchase, you’ve the right to make up the missing payments, wipe out your debts and stop foreclosure, Paladin states. If you can’t do that, the trustee will auction your home to the highest bidder; as your lender is not conducting the sale , it may bid on the house whether it selects.
Even though the lender doesn’t have to go to court in a trust deed state, it is possible to file in court to halt the foreclosure, Nolo states. After that you can ask the judge for a temporary restraining order–typically lasting about 10 days–and then a preliminary injunction to delay foreclosure before the judge decides the case. If the judge decides in your favor, then he will issue a permanent injunction.
If your lender uses a judicial foreclosure rather, the procedure could stretch for months , Bankrate states. The vast majority of California cases are non-judicial, however some lenders favor going to court since if the sale doesn’t repay your mortgage, they could pursue you for a”deficiency judgment,” something the state doesn’t let with a non-judicial foreclosure. After a judicial foreclosure auction, then you have as much as a year to purchase your home back from the very best bidder in the auction.