California Foreclosure Law
Cal. Civ. Code §§ 2924 to 2924l; Cal. Civ. Proc. Code §§ 580a
to 580d (West)
Most Common Method of Foreclosure: Non-judicial; Power of sale in deed of trust.
Judicial Foreclosure Procedure: See Cal. Civ. Proc. Code, §§ 725a to 730.5 (West). Generally
judicial foreclosure used only if there are problems requiring court resolution or if likelihood
for recovery of deficiency judgment.
Number of Notices: Two: Notice of default and notice of sale. Amount of Notice Required: For a
notice of default, three months. For a notice of sale, twenty days.
Content of Notice: Notice of default: a) Identify the mortgage; b) nature of the breach; c)
election to sell to satisfy obligation; and d) notice of right to cure, if curable. Notice must be
filed in the county where the mortgaged property is located. Notice of Sale: a) Time and place of
sale; and b) total amount due plus a reasonable estimate of costs and expenses. Cal. Civ.
Code § 2924c. Name, in-state street address, and toll-free or instate telephone number of the trustee or
its agent. Street address or legal description of property. If personal property or fixtures are to
be sold, these must be described. Cal. Civ. Code § 2924f.
Method of Service: By certified or registered mail, and by regular first-class mail and by publication once a week for three weeks,
beginning twenty days before the sale, in a newspaper of general circulation, and posting in a public place and in a conspicuous place on the property. Notice of sale must also be recorded.
Cal. Civ. Code § 2924b.
Right to Cure Default/Reinstate: Can cure within five days before the sale. Cal. Civ. Code § 2924c.
Redemption: None, unless there is a deficiency judgment. (See above for restrictions on
deficiencies.) Two-year right of redemp- tion if court grants deficiency judgment. Cal. Civ. Proc.
Post-Sale Provisions Regarding Proceeds: Within thirty days of sale, the trustee must give notice
of any surplus to anyone who may have a claim on the proceeds. Claims are to be sent to the trustee
to determine priority. If the trustee cannot resolve the claims within ninety days, then the court
will. If there are no disputes, the claims must be paid within thirty days. Cal. Civ. Code
Deficiency: No deficiency upon power of sale foreclosure. Cal. Civ. Proc. Code § 580d. No
deficiency upon judicial foreclosure of purchase money mortgage on owner-occupied dwelling with
four or fewer units, or for failure to complete purchase by contract for deed. Cal. Civ. Proc. Code
§ 580b. When deficiencies are permit- ted, amount is limited by the fair market value of the
property. Cal. Civ. Proc. Code §§ 580a, 726(b).
High-Cost Home Loans: A provision in a loan agreement that violates enumerated subsections of the
high-cost home loan act is unenforceable against borrower. The listed subsections forbid, inter
alia, call provisions and balloon payments. The court may reform the loan terms to conform to the
statute. Cal. Fin. Code§§ 4973, 4978.
Miscellaneous: Special notice is required under the Unruh Act for deeds of trust, where the
security interest is a single-family owner- occupied residence and it secures the obligation under
the Unruh Retail Installment Sales Act (§§ 1801 to 1812.20). Cal. Civ. Code
§ 2924f. Notice to occupants/tenants regarding effect of foreclo- sure is required. Cal. Civ. Code
Special Temporary Provision Mandating Pre-Foreclosure Loss Mitigation Contact: Effective September
6, 2008 for loans made between January 1, 2003 and December 31, 2007 mortgagee cannot file notice
of default until thirty days after contacting borrower to explore options to avoid foreclosure.
Must advise borrower of opportunity for conference with mortgagee and sched- ule conference within
fourteen days of request. Notice of default must include declaration of compliance with this provision. Cal.
Civ. Code § 2923.5. Legislature has issued declaration supporting loan modifications, but not
mandating it. Cal. Civ. Code § 2923.6.
Special Temporary Provision Authorizing Delay of Foreclosure Sale: Statute requires ninety-day delay after filing notice of default and before sale in order to allow servicer to review borrower for loan modification. Delay does not apply if servicer has been
exempted from provision by Commissioner of Corporations. Commissioner exempts servicers based on showing they have a loan modification review process that complies with standards in statute. Effective May 21, 2009 to Jan. 1, 2011 for loans recorded Jan.
1, 2003 to Jan. 1, 2008. Cal. Civ. Code § 2923.52-53.