Re: Kawika is correct . . . but there's a little more
Posted by Keith(CA) on February 21, 2006 at 12:51:35:
In Reply to: What is California after foreclosure redemption time period? posted by Deb on February 13, 2006 at 21:48:41:
: Once and for all, I need to get this cleared up: how long AFTER the sale of a home in forclosure can the owner come back to the buyer and say "here's my money, gimme back my house"? I know that California has a redemption period before the foreclosure sale can occur (90 days notice of default and 21 notice before trustee sale can occur), but that's not the timeframe I'm interested in...it's the time AFTER the sale has happened.
: I've heard/read that some states have redemption periods that can last up to a year after the sale, which will seriously inhibit title companies issuing title insurance until the redemption period has passed.
: But has anyone ever heard of California having a ONE YEAR REDEMPTION PERIOD AFTER THE FORECLOSURE SALE???? I heard that this was in effect to protect the homeowner from doing anything to hurt themselves "under duress". I've also heard that California has NO redemption period after the sale. I'm really confused. I'd also like to find this in the actual text of the real estate law... anyone know what statute that might be?
: Thanks!
: Deb
Deb,
The vast majority of CA foreclosures are of the non-judicial variety. There is absolutely NO redemption period after the Trustee's sale, except for the exeptions listed below. A non-judically foreclosing lender is also forbidden to seek a deficiency judgment against a debtor if proceeds from the sale are insufficient to cover the indebtedness and all associated costs.
In the event of a judicial foreclosure (often when foreclosing over a court-awared judgment, almost never when foreclosing over a loan default), there is a redemption period of . . .
(a) Three months if the proceeds of the sale is of sufficient value to cover the indebtedness and all associated costs;(b) One year if the sale proceeds are insufficient.
Some additional info . . .
Exception #1: If there is an IRS lien attached to the subject property, the IRS has an automatic 90 day right of redemption regardless of the kind of foreclosure (judicial or non-judicial).
Exception #2: New for 2006, it appears that homeowner associations that foreclose non-judicially for an amount equal to or exceeding $1800 will also create a 90-day right of redemption. (Associations may no longer foreclose for amounts less than $1800)
This next topic is not about redemption after foreclosure, but I think this is where some of your confusion is coming from.
In the even that the home is sold prior to auction (meaning there was no foreclosure, but the house was sold by the homeowner while the homeowner was still in default), then there exists a two-year right of rescission where the former owner may rescind his/her sale for reasons of unconscionable advantage commited by the purchasor. This right of rescission cannot be forfeit or otherwise waived.
This right of rescission is not an "after foreclosure" rule because no foreclosure takes place, but it is an "after sale" rule and this does address your comment about homeowner protection "under duress". And during the two years that this right exists, it may be perceived as a cloud and can affect your ability to obtain title insurance. (See California Civil Code §1695.14)
