The two methods Californiauses for foreclosures are known as non-judicial and judicial. A non-judicialforeclosure does not involve court action. In California non-judicial remedies havestringent notice requirements and the mortgage documents are required tocontain a power of sale language in order to use this type of foreclosuremethod. The deed of trust will usually contain a power of sale clause, whichupon default allows a trustee to sell the property in order to satisfy theunderlying defaulted loan. The trustee acts as a representative of the lenderto effectuate the sale.
California has a requirement called the one-action rule. If a foreclosure is completed bynon-judicial means, a second action to recover a deficiency judgment is notpermitted. The judicial process is much longer, thus is rarely used. Using ajudicial foreclosure, a lender may recover a deficiency judgment in certaincircumstances. Judicial foreclosures are permitted in California and these usually occur when nopower of sale language is included in the loan documents.