What are the rules and regulations for foreclosures happening on investment properties in CA?

Yes, as of June 15, 2009, the effective date of the California Mortgage Foreclosure Prevention Act. The Act modifies the foreclosure process to provide additional time for borrowers to work out loan modifications while providing an exemption for mortgage loan servicers that have implemented a comprehensive loan modification program.

The new law places a 90 day delay on some foreclosures. But, to be covered under the new law, in addition to the lender not having an exemption, the mortgage must be on the borrower’s principal residence at the time the loan became delinquent. Additionally, the mortgage must be secured by residential property and have been recorded between January 1, 2003, and January 1, 2008, and the first mortgage or deed of trust secured by that property. Further, the 90 days does not begin to run until a notice of default has been recorded.

You should consult an experienced real estate attorney before your mortgagor files the foreclosure action. You could possibly negotiate a re-payment arrangement with your lender that would alleviate the need for a foreclosure action. Your attorney also will be much more familiar than you with your jurisdiction’s laws and procedures governing residential and investment property foreclosures, and perhaps s/he will be able to identify and pursue defenses against the foreclosure action of which you may be unaware.