Steps to Foreclosure in California

California lenders favor the nonjudicial foreclosure procedure. Nonjudicial foreclosure is permitted because, in part, California is a "title theory" state. This means that the lender keeps equitable title to the land until the loan is paid off. When a borrower defaults on a mortgage, the lender can initiate foreclosure action to sell the property and recoup what is owed from those proceeds.

• 1

  Notify the borrower that she is in default of payment. According to All Foreclosure, the first missed payment is a technical default. Most lenders do not begin formal foreclosure proceedings until the third missed payment.

• 2

  File a notice of default with the county recorder in the county where the property is located. This document lists the amount owed. A copy of this notice must be mailed to the borrower. Within the next 60 days, the borrower may pay the amount due to stave off the foreclosure.

• 3

  Record the notice of trustee sale. This document sets an auction date, lists the time and place of the auction and lists the name and address of the lender. A copy of this notice must be mailed to the borrower. The auction date must be at least 20 days after this notice is filed with the county recorder.

• 4

  Sell the property to the highest bidder. After 20 days has passed, the lender can auction the property. The auction must occur during regular business hours at the place listed in the notice.