There are two types of foreclosure allowed in the state of California, Judicial Foreclosure and Non-Judicial Foreclosure.
Judicial Foreclosure is very rare in California and requires the lender to sue the owner in foreclosure and proceed with a trial in a court of law. Appraisals and other items are required, and there is still an auction. The owner has the right of redemption allowing them to buy it back from the successful bidder at auction for one year after the sale. The advantage of judicial foreclosure for the lender is that they can receive a deficiency judgment against the borrower for the difference between the amount owed (including penalties, fees, and costs), and the amount received at auction.
Non-Judicial Foreclosure is what most people are referring to when they talk about "foreclosure" in California. When using non-judicial foreclosure lenders give up their right to collect a deficiency judgment against the borrower, however, most lenders prefer this process given the expedited time frame and minimal costs. Non-judicial foreclosure sales are typically postponed one or more times, and can be postponed for up to one year based on certain postponement reasons.
Non-Judicial: Requires Court Trial: No Expedited Time Frame: Yes- 111 Days Right of Redemption: No- Expect HOA liens which have 90 days Deficieny Judgement: No
Judicial: Requires Court Trial: Yes Expedited Time Frame: No Right of Redemption: No Deficieny Judgement: Yes- Expect purchase money
Notice of Default
Start of foreclosure process. Initial notice recorded after borrower fails to meet the terms of their loan.
Notice of Trustee Sale
Sets auction date. Can be recorded 3 months after Notice of Default.
Initial auction date can be just 20 days after Notice of Trustee’s Sale is recorded.
Transfers property to winning bidder. By default, this will be the lender if no bid higher than the lender’s opening bid is received.