If you’ve fallen behind on mortgage payments and are now facing foreclosure in Chico, you may feel like time is running out and your options are disappearing. The phone calls, letters, and legal notices can be overwhelming, and many homeowners mistakenly believe that once foreclosure starts, the bank automatically takes over and there’s nothing left they can do.
The truth is you can still sell your house during the foreclosure process — and in many cases, selling is the smartest way to protect your credit, avoid eviction, and regain financial stability.
Foreclosure does not mean you’ve lost ownership right away. Until the foreclosure auction actually takes place, you still control the property, and that means you can sell it, pay off the loan, and stop foreclosure before it permanently damages your financial future.
This guide will explain everything step by step so you understand:
• How foreclosure works in Chico
• When you can legally sell
• How selling stops foreclosure
• What happens to your credit
• Your best options if time is short
Let’s break it down clearly so you can make the best decision for your situation.
Understanding How Foreclosure Works in Chico
Most foreclosures in California follow a non-judicial foreclosure process, which means the lender does not need to go through court to take the property back. Because there is no judge involved, the timeline often moves faster than homeowners expect.
Here’s what typically happens.
Missed Mortgage Payments
The process usually begins after you miss one or two payments. At first, the lender may simply send reminders or late notices. But once you fall around 90 days behind, the situation becomes more serious and moves into formal foreclosure status.
At this point, late fees are added, collection calls increase, and the lender begins preparing legal paperwork.
Notice of Default (NOD)
The lender files a Notice of Default with the county. This document officially records that you are behind on your loan and starts the foreclosure clock. You will receive a copy in the mail.
This is a critical moment because you still have time and control. A Notice of Default does not mean you’ve lost your home — it means the lender is giving you a final window to resolve the debt.
90-Day Reinstatement Period
After the Notice of Default is recorded, there is typically about 90 days before the next step. During this time, you can:
• Catch up on missed payments
• Apply for a loan modification
• Refinance (if possible)
• OR sell the property
Many homeowners in Chico choose to sell during this period because it gives them enough time to avoid foreclosure without scrambling at the last minute.
Notice of Trustee Sale
If the loan is still not resolved after those 90 days, the lender records a Notice of Trustee Sale, which schedules the foreclosure auction date. This notice is also mailed to you and posted publicly.
The sale date is usually set about 21 days later, which means your timeline suddenly becomes much tighter.
Trustee Sale (Foreclosure Auction)
If nothing changes before the scheduled date, the property is sold at a public auction to the highest bidder. Once this happens, ownership transfers, and your right to sell the property is gone.
The key takeaway: You can sell your house at any point BEFORE the auction takes place.
Can You Sell After Receiving a Notice of Default? Absolutely.
This is actually one of the most common times homeowners decide to sell.
At this stage, you still fully own the home, and foreclosure has not yet damaged your credit in the same severe way a completed foreclosure would. Selling now gives you the highest chance of walking away with some equity and protecting your financial future.
You can choose to list with a real estate agent or sell directly to a buyer. Because you have more time than in later stages, you may be able to explore multiple options and compare offers.
The important thing is not to wait. The foreclosure clock is ticking, and delays can push you closer to the auction date when choices become limited.
Can You Sell After the Notice of Trustee Sale Is Filed? Yes — But Time Is Critical
Once the foreclosure auction date has been scheduled, you are in the most urgent stage. You may only have a few weeks left before the home is sold at auction.
At this point, traditional listings become riskier. Selling with an agent involves showings, inspections, buyer negotiations, and loan approvals. Even if you find a buyer, financing delays can cause the deal to fall apart — and the bank will not usually stop foreclosure just because you’re “under contract.”
That’s why many Chico homeowners in this stage turn to cash buyers who can close quickly without banks, repairs, or contingencies. Speed and certainty become more important than getting the absolute highest price.
How Selling Your House Stops Foreclosure
When you sell your home, the proceeds from the sale are used to pay off your mortgage balance and any late fees. Once the lender is paid, the foreclosure process is canceled because the debt no longer exists.
This means:
• The auction is stopped
• The foreclosure does not complete
• You avoid the most severe credit damage
• You maintain more control over your move
Selling essentially gives you a financial reset instead of a long-term foreclosure record.
How Foreclosure Impacts Your Credit — And How Selling Helps
A completed foreclosure can lower your credit score by 100 to 160 points or more and remain on your credit report for up to seven years. This can make it harder to rent, buy another home, get loans, or even qualify for certain jobs.
By selling before foreclosure is finalized, you avoid having a foreclosure listed on your record. While late payments may still appear, the long-term damage is far less severe than a full foreclosure.
For many homeowners, this difference can mean being able to buy another home years sooner.
Your Main Selling Options During Foreclosure
Listing With a Real Estate Agent
This route can work if your home is in good condition and you have enough time before the auction. However, it often involves repairs, cleaning, showings, and waiting for a buyer’s loan approval. If time runs out, foreclosure may still happen even if your house is listed.
Selling As-Is to a Cash Buyer
Cash buyers purchase homes in any condition and do not rely on bank financing. That means:
• No repairs
• No inspections that delay closing
• No waiting for loan approvals
• Faster closing timelines
For homeowners near the auction date, this option often provides the most realistic way to sell in time.
What If You Owe More Than the House Is Worth?
If your mortgage balance is higher than your home’s value, you may need a short sale, where the lender agrees to accept less than the full payoff amount. Short sales require lender approval and can take time, so they may not work if foreclosure is very close.
Still, it’s better to explore this early rather than wait until options disappear.
What Happens If the Home Goes to Auction?
If the house sells at foreclosure auction:
• You lose ownership
• You lose any remaining equity
• The foreclosure hits your credit
• You may still owe money in some cases
At that point, your ability to control the outcome is gone. Acting before auction keeps you in charge.
Why Many Homeowners Choose to Sell Before Foreclosure
Foreclosure is not just a financial issue — it’s emotional. The stress, uncertainty, and fear of losing your home can affect your entire family. Selling before foreclosure allows you to move forward with a plan instead of waiting for a forced eviction.
Homeowners often say the biggest benefit is peace of mind. Once the home is sold, the constant calls, notices, and legal threats stop, and you can focus on your next chapter.
Frequently Asked Questions
Can I sell my house even if foreclosure has started?
Yes, up until the auction date.
Do I need bank permission to sell?
Not for a normal sale that pays off the loan.
Will selling hurt my credit?
Not nearly as much as a completed foreclosure.
How fast can I sell during foreclosure?
Cash sales can close in as little as 7–14 days.
Final Thoughts
Facing foreclosure in Chico can feel overwhelming, but the most important thing to remember is this: foreclosure is a process, not an instant event. Until the auction happens, you still have the legal right to sell your home and take control of the outcome.
Selling during foreclosure can help you:
• Stop the foreclosure before it’s finalized
• Protect your credit from long-term damage
• Avoid eviction and added legal stress
• Possibly walk away with remaining equity
• Move forward on your own timeline instead of the bank’s
The biggest mistake homeowners make is waiting too long. Every week that passes reduces your options and increases pressure. The earlier you explore solutions, the more choices you’ll have — and the better your financial future can look.
If you need to sell your house fast in Chico during the foreclosure process, Butte Home Buyers can help you understand your options and move quickly if time is short. You can reach out through our Contact Us page to start a no-obligation conversation and see what solutions are available for your situation.
You don’t have to go through foreclosure alone — and you don’t have to wait for the bank to decide your future.
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