Procedure.
The nonjudicial foreclosure procedure assumes the existence of either a trust deed (with the power of sale) or an HOA lien. The procedure can be summarized as follows, below.
First Stage: Notice of Default
Borrower defaults, triggering pre-foreclosure compliance requirements. The beneficiary or servicer must declare under penalty of perjury that pre-foreclosure requirements have been satisfied prior to commencing nonjudicial foreclosure proceedings. The beneficiary then signs a Declaration of Default. Our office can assist you with all of the above.
We then record a Substitution of Trustee, which authorizes our office to proceed with the foreclosure. The beneficiary must sign and notarize this document. We need the original.
Then we record the Notice of Default. That document requires information provided by the beneficiary in the Declaration of Default (amount in default, name of the borrower, etc.). We also send notices to all other parties who are entitled to notice by law.
After recording the Notice of Default, the borrower is entitled to 3 months to cure the default. No further action can be taken during this period. The borrower has the option to cure or reinstate by paying the full amount in default, including all costs, late charges, etc. incurred to this point.
Second Stage: Notice of Sale and Publication of Notice of Sale
A notice of sale is recorded and sent to individuals entitled to receive notice. The Notice is also published for a period of at least 20 days prior to the sale as required by statute.
During this period, the parties have to be vigilant as to court orders or a bankruptcy stay could enjoin sale (or cause the sale to be void).
Third Stage: Sale
The property is sold at an auction through our office to the highest bidder. The opening bid is set by the beneficiary.
Fourth Stage: Post Sale
A trustee sale in California is not deemed final on the sale date because a new law allows for “eligible buyers” to over-bid the sale through their own bid for up to 45 days following the sale. This law is new as of 2021 in California, and is currently set to sunset in 2026. More information is here.