Judicial foreclosures are on the rise in California and unlike a trustee’s sale in which a lender is likely to get the property due to a deficiency judgment, a judicial foreclosure provides a redemption period for the delinquent borrower. Time for redemption depends on whether there is a deficiency liability; three months if so, and one year if not. The buyer (who is not the borrower) receives a certificate of sale for the amount due the levying officer. To redeem, the previous owner must remit the purchase price at time of sale, assessed taxes, the cost of senior and junior liens, and the interest on the total sum, all prior to the expiration date. For more on this continue reading the following article from JDSupra.
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The statutory right of redemption is the privilege given the borrower/trustor and the trustor’s successor-in-interest to repurchase the property after a judicial foreclosure sale by payment of the amount of the sales price plus interest. CCP 729.020. The policy of providing this right is to encourage the purchaser at the sale to pay the full value of the property.
When there is a deficiency liability after the sale (that is, the sales proceeds are not sufficient to satisfy the debt, plus interest and costs), the redemption period is one year after the sale. CCP 729.030(b).
- the purchase price at the sale;
- the amount of assessments or taxes, and reasonable sums for fire insurance premiums and maintenance expenses, paid by the purchaser;
- any amounts paid on account of senior liens to the extent necessary to protect the purchaser’s interest;
- any liens held by the purchaser that were junior to the lien foreclosed; and
- interest on the above sums at the legal rate.