It is important to remember that a foreclosure by Power of Sale in which the Seller financed the transaction is considered a non-judicial foreclosure (Civil Code § 2924). Thus, the Power of Sale falls under all other provisions that are applicable under a non-judicial foreclosure. A Lender must provide the Borrower a three (3) month period of notice of default (NOD). Subsequent to the three (3) month period, the Lender must provide a 20-day notice of sale (NOS). Thereafter, the Lender may non-judicially foreclose on the property after the 20-day NOS. Failing to provide an NOD or an NOS are grounds for reversal. Also, Section 2924 also allows the attorney or the trustee to conduct the auction (as the auctioneer). More importantly, the provision allows the defaulting Borrower to cure under Equity of Redemption. In conducting the foreclosure sale through the Power of Sale, § 2924(g) requires that the sale must be held on a regular business day (Monday through Friday) and must not be on a Holiday. Furthermore, the trustee may continue the sale at least 3 times by giving verbal announcements at the date of the auction (without giving written notice).

JUDICIAL FORECLOSURE

After the foreclosure sale has been consummated, the Borrower has up to one year to redeem his/her property under Right of Redemption. Sections 726(e) and 729.010 afforded a defaulted Borrower has the right to redeem the property, provided that there was no deficiency or that the Lender waived deficiency. Section 729.020 allows ONLY the Borrower the right to redeem (not a junior lien holder or a Guarantor). Section 729.030 provides that the right of redemption is within one (1) year from the date of the foreclosure. Section 729.040 dictates that a purchaser at a foreclosure, in which there is no deficiency (or waiver thereof), obtains a certificate of sale, and will only obtain the Deed of Trust after the redemption period expired. Section 729.060 stipulates the redemption price, which includes:

• The total price at the time of the sale,
• Assessments fees,
• Taxes,
• Insurance,
• Payments from the foreclosed date to the time of redemption,
• Interests, and
• Rents and Profit – Value of the use.

Finally, under § 729.080(b), at a senior lien holder’s judicial foreclosure in which the junior lien holder is named as a party, if the junior lien holder failed to purchase the property, then he/she is froze out, even if the Borrower redeemed the property within the Right of Redemption period. The reason is because the junior lien holder is considered to be a party to the action (i.e. he had his one form of action), but failed to exercise his power by purchasing the property, seeking a deficiency and holding a fair value hearing within three (3) months.

As you can see, the foreclosure process is highly regulated by statutes and regulations. Regardless of whether it is judicial or non-judicial foreclosure, the process is cumbersome and contains numerous requirements and exceptions. Regardless of whether you are a Borrower or a Lender, it is extremely important to retain an experienced real estate attorney that has specific knowledge and experience on foreclosure. The experienced foreclosure attorneys of Smith & Garg, LLC are ready to serve the Long Beach residents and those in the greater Los Angeles and Orange County areas. Please contact one of the Smith & Garg, LLC’s real estate attorneys for a personal consultation. We can be reached at 1-877-517-4275.

Should you have any questions or concerns, please contact our experienced real estate attorneys at Smith & Garg, LLC. The experienced real estate transaction and litigation attorneys at Smith & Garg, LLC can help.

Call Smith & Garg, LLC today at 1-877-517-4275 or complete our Contact Form and let us assist you.