Lenders who have loans secured by commercial real estate in California may notice that California has unique laws and considerations when it comes to nonjudicial foreclosure. While specific laws and procedures vary depending on the terms outlined in the deed of trust or any applicable local regulations, most California commercial foreclosure laws demand that foreclosures follow a similar process.
If you are looking for an expert in foreclosure compliance law, the experienced professionals at Total Lender Solutions can act as an extension of your team. We provide hand-in-hand partnership, as well as continuing education for your team.
Read more about the stages of a nonjudicial commercial foreclosure in California.
An Overview of California Commercial Foreclosure Laws
Nonjudicial foreclosures can only be completed on real estate secured by a deed of trust. A Deed of Trust is sometimes used interchangeably with a mortgage, but they are different. A Deed of Trust involves three parties: the borrower (trustor), the lender (beneficiary), and a neutral third party known as the trustee. The trustee holds the legal title to the property until the debt is repaid.
The commercial foreclosure process happens generally in four stages: The Notice of Default (NOD) stage, the Notice of Sale (NOS) stage, foreclosure, and post-foreclosure.
Notice of Default:
When the borrower defaults on the loan, the lender initiates the foreclosure process by issuing a Notice of Default. The NOD is recorded with the county recorder’s office where the property is located and must be sent to the borrower by certified mail within a specified timeframe.
The lender may send a notice of Balloon payment to the borrower at this time. Lenders need to note that notices must also be sent to any junior lien holders and other interested parties.
Notice of Sale:
After a waiting period that lasts a minimum of 90 days from the recording of the NOD, the lender can proceed with issuing a Notice of Sale (NOS).
The NOS must be published in a newspaper in the county where the property is located for a specific period and posted at the property itself. The NOS includes relevant details about the property. The sale date of the auction is scheduled and posted on the NOS.
Trustee’s Sale:
On the day of the sale, the auction is conducted by the trustee, who sells the property to the highest bidder. The sale typically takes place on the property or at the county courthouse.
Your Team’s Expert Partner in California Commercial Foreclosure Law
Consult a foreclosure expert who specializes in California commercial foreclosure law and who can provide specific guidance based on the unique circumstances of your commercial real estate property. Total Lender Solutions is a team of highly experienced real estate professionals and legal experts. We maximize your return on your assets by guiding lender teams through the foreclosure process, ensuring that our clients feel confident in reaching a successful outcome. Contact us today for more information about your commercial real estate foreclosure.
