Some lenders will offer a forbearance agreement in order to avoid a foreclosure. A forbearance agreement will allow the borrower to pay a slightly higher payment until the past due loan is brought current.
If the lender is unwilling to work out an agreement they will file a notice of default (NOD) with the county recorders office. Once this is filed the borrower has a three month period in which to pay the past due amount including foreclosure fee’s.
If the loan is not reinstated during the three month period the trustee files a notice of sale. This notice must contain the date, time and location of the sale. The notice of sale is published in a local periodical and posted on the door of the subject property. The trustee must publish the notice at least once per week for three weeks. During the three week period the borrower can still reinstate the loan by paying the past due balance and applicable fee’s. If the sale is postponed more than three times a new notice of sale must be filed.
At the end of the three week period the home is auctioned to the highest bidder who pays with cash or by cashiers check to the lender. The lender then trasfers title to the new owner. The now previous owner has no recourse for recovering the home once the title is transfered.