What is a foreclosure sale?

A foreclosure sale is a legal process that happens when a homeowner has failed to make full payments on their mortgage loan. In California, a borrower can be in foreclosure if they are at least one hundred eighty days delinquent in their payments. When this happens, the lender can file a Notice of Default with the county recorder- Recorder’s Office. This document officially begins the foreclosure process. The foreclosure sale happens after a Notice of Trustee Sale has been filed with the Recorder- Recorder’s Office. This document informs the public of the sale date, time, and place. Typically, foreclosure sales are ‘non-judicial’, meaning they are held outside of a court. Foreclosure sales are usually held at the county’s place of auction, and can be conducted in person or online, depending on the county. The foreclosure sale culminates with the sale of the mortgaged property to the highest bidder. As long as the lender is the highest bidder, they will be the ones to purchase the property. If the highest bidder is not the lender, then they become the new owner of the mortgaged property. Foreclosure sales are the final step in the foreclosure process, and can have devastating consequences for the homeowner. Even if the original borrower isn’t the highest bidder, they can still be responsible for any outstanding loan balance that surpasses the sale price. Foreclosure sales can also severely damage the borrower’s credit rating, making it difficult to obtain loans in the future.

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What is a foreclosure sale?

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