Everyone who has made the painful decision to let an unaffordable house go to foreclosure wants to know how long before they have to get out. While the statutory foreclosure process in California takes a little more than 4 months, if the the creditor is perfectly efficient, creditors aren’t perfectly efficient, and often seem to be deliberately dilatory. The foreclosure process stretches out. But how long?

I got a good data point today from a client in a pending Chapter 13 filed late in 2009. The client has not made a payment in 17 months. The confirmed Chapter 13 plan provides that the debtor will surrender the house and grants the creditor relief from stay. The lender just denied a loan modification. And the creditor has not yet taken the first, legally mandated step in the foreclosure process!

So, even if the lender starts foreclosure tomorrow, it will be September, almost two years from the filing of the bankruptcy case before title to the house changes hands. And I am fairly confident that the lender will not initiate foreclosure proceeding immediately, and even more confident that they will not be perfectly efficient in doing so.

The future is not predictable, and what is true today may not be true tomorrow, but it is clear that lenders are not in a hurry to own more California real estate.