Experienced Real Estate Foreclosure Attorneys
Foreclosure is a complex process, and therefore cannot be summed up in a simple explanation. However, the following information can assist you in getting a basic understanding of what is involved in foreclosure in California. In order to understand the process more fully, you first need to define it.
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What is A Foreclosure?
When a person buys a home, he or she normally borrows a part of the purchase price from a mortgage company or a bank. In other instances, the homeowner may borrow money in the form of a home equity loan. This is done after a home is purchased, and involves borrowing money against the equity in a house. In some cases, property owners may refinance their mortgage and combine it with home equity financing. However, if they cannot pay back their mortgage on time, the property will go into foreclosure.
Can A Real Estate Attorney Help With A Foreclosure?
In all of the above examples, the lender normally places a lien against the real estate in order to obtain repayment of the funding. If the buyer fails to make a payment on the loan, or defaults on the financing, the lender can foreclosure on the house. In turn, the lender can force a sale of the residence to pay for the outstanding debt.
As noted, foreclosure can be complex as it can involve various types of financing. Therefore, you need the help of a San Diego real estate lawyer to look at your options when you have trouble paying your mortgage.
What Are the Different Types of Foreclosure?
In California, lenders can foreclosure on a mortgage or deed of trust by employing a foreclosure process that is non-judicial or judicial. Usually, the lender opts to go outside the court system, or uses a non-judicial process when foreclosing on a property.
A non-judicial foreclosure is used when a power-of-sale clause is included in the deed that secures the loan. It gives a trustee the power to sell the home to pay off the remainder of the debt, at the lender’s request, should a default occur.
When a lender uses non-judicial foreclosure against a borrower who fails to pay on the mortgage of his or her primary residence, the lender gives up the right to obtain a deficiency judgment against the mortgagor. This process is often used as it goes more quickly and does not cost as much.
On the other hand, a judicial foreclosure involves filing a lawsuit to obtain a court order to sell the home or foreclose on it. It is used when no power-of-sale is included in a deed of trust or mortgage. Generally, after the court orders the sale of the home, it is auctioned to the highest bidder. A judicial foreclosure is rare in the state of California.
We Help You Determine What Are the Right Steps in A Foreclosure
If you are thinking about going the foreclosure route in San Diego, it is important to keep in mind that there are many steps to the process. In fact, most times what seems like a good direction for you in the foreclosure proceeding can actually be very detrimental. It’s best to get accurate answers and form a strategy that works for you. At Equity Legal LLP, we worked for the banks before we branched off on our own helping people in need of accurate and valuable foreclosure defense.
- Can I stay in my home while I’m in the foreclosure process?
- Can I sue my lender for my foreclosure?
- Is foreclosure the right avenue or is bankruptcy?
- Should I short sale my home?
- Will I incur tax liabilities as a result of my foreclosure?
- What happens with a 2nd lien owner during a foreclosure?
We are Property Default Specialist.
Real estate foreclosure is a complex and tricky process. There are many steps and paths to take in a foreclosure proceeding and it’s best to know the right steps to take for your current legal situation. We have successfully helped many business owners, homeowners, and investors navigate the foreclosure laws. We have won several foreclosure litigation cases against banks, and will go the extra mile for you.
Property Foreclosures in California
In California, the foreclosure process usually follows the steps mandated for a non-judicial foreclosure. To initiate the process, the lender contacts the borrower to assess the entire financial situation and explore any options that can be used to avoid foreclosure. This is called a foreclosure avoidance assessment. By law, the lender:
- Cannot begin the foreclosure process for 30 days after contacting the property owner about the assessment.
- Must advise the property owner that he or she has the right to request another meeting on avoiding foreclosure. That meeting should be scheduled within 14 days.
- The property owner may have a foreclosure attorney, HUD-certified agency, or other advisor speak on his or her behalf with the lending institution about avoiding foreclosure. A property owner does not have to accept any solution that the attorney or advisor and the lender create during their discussion.
When Does a Foreclosure Start?
If no plan is instituted to avoid foreclosure, the lender can record a Notice of Default. This is done in the county where the real estate is located. It is done at least 30 days after the foreclosure avoidance assessment, and marks the start of the formal foreclosure process. The foreclosure letter is sent by certified mail within 10 days after it is recorded. In turn, the borrower has 90 days from the recording of the Notice of Default to pay the default, or bring the balance up-to-date.If the borrower does not pay what he or she owes, a Notice of Sale is recorded in the county where the home is located. This Notice is filed at least 90 days from the recording date of the Notice of Default. The Notice of Sale states that a trustee will sell the property at auction within 21 days. The Notice of Sale must be processed as follows:
- It must be sent to the property owner by certified mail.
- It must be published each week in a local newspaper for three consecutive weeks before the date of the sale.
- It must be posted on the property or in a public place, such as the local courthouse.
- The Notice must reveal the date, time, and location of the sale, including the property address, trustee’s name and contact details, and a statement that the property will be sold at public auction.
After 21 days after the posting of the Notice of Sale, the property is sold at auction. The bidder who is successful must pay the entire amount of the home with either a cashier’s check or cash. In turn, the bidder receives a trustee’s deed. The lender also bids at the auction for the amount of the balance plus the costs for foreclosure. If not one bids on the house, it is given to the lender.
Note: before a foreclosure, a lender may send foreclosure letters over a period of several months with a demand for payment. The letters are not considered Notices of Default.
How to End a Foreclosure
To stop a foreclosure sale, the property owner must respond up to five days before the sale to pay the default. When this occurs, it is called a loan reinstatement. During the 21-day period, after the Notice of Sale is posted, any financial institution or individual who has an interest in the property has a right to redeem the house. They can do this by paying the full balance of the loan amount.
In California, a San Diego real estate lawyer can help you avoid the foreclosure process by reviewing your financial situation, and by exploring ways to avoid the foreclosure process. Again, foreclosure can be complicated to understand. That is why you need to learn how to take a positive stance if foreclosure happens to be looming in the wings.
