In California, if you are a lender with a delinquent borrower and you are facing foreclosure, your first instinct may be to panic. After all, a commercial foreclosure in California can be time-consuming, expensive, and stressful. If you are concerned about recovering your assets in a timely manner, your best option is to depend on a foreclosure expert to execute a foreclosure strategy and navigate any delays.
The foreclosure professionals at Total Lender Solutions have helped hundreds of lenders in California manage their foreclosures so their teams can stay focused on their customers. If you are concerned about the timeline of a foreclosure in California, consider outsourcing your foreclosure process to move the foreclosure process along as efficiently as possible.
Read below to learn more about what you can expect from commercial foreclosure in California.
An Overview of California Foreclosure Law
In states like California where a commercial property can be foreclosed non-judicially, there are three parties involved: the borrower (trustor), the lender (beneficiary), and a neutral third party known as the trustee. To begin the foreclosure process, the lender alerts the trustee, who files the necessary documentation.
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. In the NOD stage, the notice is recorded with the county recorder’s office where the property is located, sent to the borrower, and sent to any junior lienholders. After a waiting period of at least 90 days from the recording of the NOD, the lender can issue the NOS, which must be published in a newspaper in the county where the property is located and at the property itself. The NOS includes the sale date of the auction. On the day of the sale, the auction is conducted by the trustee, who sells the property to the highest bidder.
How Long Does a Commercial Foreclosure in California Take?
Because of state law, the period from the first issuance of the NOD to the sale date must be at least 90 days. However, many foreclosures last longer than that. Some common reasons that foreclosures take longer than ninety days include:
Incomplete, Incorrect or Missing Documents
Many lenders, when faced with a foreclosure, may find that they cannot locate, organize, and file all of the necessary documents and agreements in time to move the foreclosure along quickly. Errors in paperwork can also result in teams having to file and refile with the county court.
Litigation and Alternative Resolution
If you are in litigation with your borrower, this may delay the foreclosure until negotiations are complete. If your borrower can cure the default or litigate a different arrangement, this may delay the foreclosure process or stop the foreclosure altogether.
Bankruptcy or a Temporary Restraining Order
If the borrower files for bankruptcy or a temporary restraining order, this halts the foreclosure process until either the ruling is overturned or expires. A borrower might file a TRO if the lender has been caught practicing illegal debt collection or foreclosure practices.
Are You a Lender Needing to Foreclose Quickly?
There are no easy shortcuts when it comes to foreclosing commercial real estate in California. However, a foreclosure partner like Total Lender Solutions can act as an extension of your team, helping you find the path to the best outcome. Our years of experience in California and six other states means that we can help your team avoid unnecessary delays.
Our team has helped hundreds of clients take care of property ownership issues, from issuing foreclosures to UCC sales and beyond. If you need assistance with a foreclosure on your California real estate property, don’t hesitate to contact our team by filling out our contact form.
