Which type of foreclosure does the four-year statute of limitations apply to?

The four-year statute of limitations is specifically applicable to judicial foreclosure actions. In judicial foreclosure, the lender must file a lawsuit to obtain a court order for foreclosure, and the time frame within which they can initiate that lawsuit is governed by the statute of limitations. In California, this period is four years from the date of the default on the loan.

This limitation ensures that lenders cannot indefinitely wait to commence foreclosure proceedings, thereby protecting borrowers from prolonged uncertainty regarding their financial obligations and property rights.

In contrast, non-judicial foreclosure does not involve the courts to the same extent; instead, it is governed by the power of sale clause found in the deed of trust. The timing and processes associated with non-judicial foreclosure are distinct and do not fall under the same statutory limitations as judicial foreclosures. This difference is crucial in understanding how the foreclosure process operates under California law.