Hi all, I’m looking at pre-foreclosure properties in the so cal area but as I understand it, the law in Calif has a judicial and non-judicial review. In the case of judicial review (which according to 1 foreclosure listing site is quite rare), has a redemption period of 12 months (i.e., the Home Owner can claim the house back within a 12 month period even if you have sould it). Does anyone know what (if any) is the redemption period for a non-judicial review? Also, has anyone had any situation where the owner decided to buy the house again after he/she sold?
There are two major ways that property can be foreclosed on in California.
The first is a mortgage foreclosure (rare in California). If a lender opts for this type of foreclosure, the owner has a right of redemption. If the sale proceeds are less than the mortgage debt, the owner has a one-year period of redemption. If the sale proceeds satisfy the debt, the period of redemption is three months. By paying the new purchaser the sales cost plus interest within one of these time limits, the original owner can regain title. The original owner cannot waive the right of redemption. Because of the right of redemption, the new purchaser will have difficulty selling the property while the original owner has the right to redeem. If the property is not redeemed within the time limits, the sheriff issues a sheriff’s deed. The purchaser receives all of the rights of the foreclosed owner without the foreclosing liens and liens junior to it. Liens senior to the foreclosing lien will still be in force against the property.
Because of the lengthy period and costs associated with a mortgage foreclosure as well as the redemption rights, the trust deed is more common in California. Under this arrangement there are three parties: (1) The Trustor (Borrower), (2) The Trustee (A third party who holds naked legal title and acts on behalf of the Beneficiary in case of default), and (3) The Beneficiary (The lender). After a trustee’s sale, the borrower (the Trustor) has no right of redemption and the new owner can occupy the property immediately.
If you are planning on buying at a trustee’s sale you can find these sales in local newspapers (newspapers of common circulation). There will be a lot of legalese but at the beginning there will be a statement to the effect that the borrower(s) are in default of a trust deed. Later on in the text there will be stated the address and approximant costs to date. The borrower has the right to reinstatement up to five days before the sale date by paying the costs to the lender.
I’m not familiar with the terms “judicial review” and “non-judicial review”. I think the correct terminology is judicial foreclosure and non-judicial foreclosure. Because foreclosure is considered an equitable remedy at law (they want the property now that they know they can’t get the money), the legal action is brought forth in superior court. In a non-judicial action no court is involved. Hope that this helps at bit.