I am often asked by homeowners considering a short sale what the timeline is for the foreclosure process in California. The following is the special foreclosure timeline for loans originated between 2003 & 2007 on owner occupied residences. This timeline does not apply to borrowers who have filed for bankruptcy. The difference between this timeline, and the traditional foreclosure timeline, is the extra time between the filing of the NOD and the Notice of Trustee Sale or NOTS. Traditionally, lenders could file a foreclosure sale date within 25 days of a NOD. This special timeline extends the period between the NOD and the NOTS.

Keep in mind that lenders often take longer than the timeframes below to foreclose, primarily because they typically prefer to workout a short sale with the borrower rather than foreclose. With that said, I highly recommend all borrowers be proactive and not allow their home to get to the 11th hour in the foreclosure process.

Once a NOTS (Notice of Trustee Sale) or foreclosure sale date, has been filed, while we can often successfully get the sale date postponed, there are no guarantees, and lenders sometimes either elect to foreclose or foreclose by mistake, simply because the left hand very often does not know what the right hand is doing at most of the nation’s major lending institutions.

Generally, lenders will file a NOD 90-120 days after a borrower stops making payments, and file a NOTS 90-120 days after the NOD, making the whole process take about 6-7 months start to finish. Many lenders extend this period dramatically when a seller is doing a short sale.

Finally, many people are under the mistaken impression that they can stay in their homes for months and even years without making payments and not get foreclosed on. While this was true in many instances in 2009, this was due to the 4 concurrent foreclosure moratoriums that were in effect in California. As of September 2009, those moratoriums have ended and lenders are now foreclosing at a brisk pace on borrowers who are simply not making payments and not pursuing any other avenues to avoid foreclosure.

Again, a short sale is almost always a better alternative to foreclosure.

As of September 8, 2008, California has a special foreclosure timeline for loans originated between 2003 and 2007, inclusive, which are secured by owner-occupied residences. The special foreclosure timeline will remain in effect until January 1, 2013. (Cal. Civ. Code § 2923.5.)