What is the foreclosure process for a government-backed loan?

The foreclosure process for a government-backed loan in California is similar to that of a non-government loan and begins when the homeowner fails to make the monthly mortgage payments. Once the payments are delinquent for some period of time, usually 90 days, the lender will file a notice of default (NOD), which serves as a public notice of the homeowner’s delinquency. At this point, the homeowner may still have an opportunity to pay the delinquent amount and save their home from foreclosure, or they can choose to transfer the deed to the lender. After the NOD is filed, the lender will then file a notice of trustee’s sale (NOTS), which will set the date for auctioning the home. At least 20 days before the sale, the lender must submit a notice to the borrower, which details the information of the sale. After the NOTS is filed, the lender will typically give the borrower a notice of right to reinstate, which provides an opportunity for the homeowner to pay the full amount of the loan, including interest and penalties, and reinstate their loan. If the property is put up for auction, and the homeowner has not been able to reinstate their loan, then the property is sold to the highest bidder and the homeowner loses their home. The homeowner then has to pay any remaining unpaid balance on the loan, plus any fees and penalties. The government-backed lender will usually cover the remaining unpaid balance, as long as the home sells for more than the amount owed.

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What is the foreclosure process for a government-backed loan?

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