Here in Sacramento County, when a lender starts a nonjudicial foreclosure, it usually begins with recording a notice of default at the county recorder’s office. That document says the borrower is behind and that foreclosure may follow. It gets mailed to you and posted on the property. The clock starts running from there, but how much time you actually have depends on your situation and the type of loan, so don’t guess. Read the notice carefully and keep every envelope.
After the notice of default is recorded, there is a waiting period before the lender can move forward. In general terms, this is the window where you can catch up, work something out, or decide what to do next. The length of that period is set by law and can vary depending on your circumstances, so check with a lawyer or a HUD-approved housing counselor rather than relying on a neighbor’s story. During this time, the lender is supposed to send you certain notices, and you have the right to ask questions. If you are confused, call the county or a housing counselor. They deal with this every day.
If the loan is not brought current or worked out, the next step is usually a notice of trustee sale. That notice sets a date for the auction. It gets recorded, mailed, and published, and it is posted on the property. This is the point where things get serious. The sale date can be postponed, but you should not assume it will be. If you are trying to sell the house or get a loan modification, tell your lender and your counselor right away. Timing matters, and a lawyer can tell you what your options are in your specific case.
Reinstatement is the right to bring the loan current by paying what is owed, plus allowed costs, before the sale happens. In plain terms, it is catching up. Whether you can reinstate, and by when, depends on the loan documents and the law, and it is not always simple to calculate. If you are thinking about reinstatement, get the payoff figure in writing from the lender and have a lawyer or a CPA look at it with you. Do not send money without confirming the amount and the deadline.
The California Homeowner Bill of Rights adds protections for many homeowners. It generally requires lenders to give you a single point of contact, to review complete loan modification applications before moving ahead with foreclosure, and to be accurate in their communications. It also limits dual tracking, which is when a lender forecloses while a modification is under review. These protections do not apply to every loan or every situation, and some rules depend on whether the property is owner-occupied. If you are unsure whether they cover you, ask a lawyer or a HUD-approved housing counselor. Keep copies of everything you send and receive, and write down who you talked to and when. That paper trail helps.
For more on this, see California foreclosure notice timeline.
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