If you find yourself facing foreclosure (or even threatened by the prospect of it), it’s absolutely critical to understand how the foreclosure process works in CA.
What is Foreclosure?
Foreclosure is a legal process that occurs when a homeowner stops making mortgage payments, and the lender takes back the property securing the loan. While it’s not an ideal situation, knowing how foreclosure works in CA can help you navigate it and emerge in the best possible position. Here are the stages of the foreclosure process you need to be aware of.
Stages of the Foreclosure Process
Foreclosure works differently in different states, but California is a Power of Sale (non-Judicial) state so we will cover how this works:
Under Power of Sale (Non-Judicial) Foreclosure:
- The lender serves you with a notice demanding payment, and the courts are not required, although there may be some level of judicial review.
- After the waiting period has passed, a deed of trust is drawn up, and control of your property is transferred to a trustee.
- The trustee can sell your property to the lender at a public auction, with notice given.
After a Foreclosure Auction
Once a foreclosure is complete, the proceeds from the sale of the property pay off the loan. If the sale of the property isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower. This is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank.
What to do to beat the foreclosure?
If you’re facing foreclosure in California, there are several steps you can take to potentially avoid or mitigate the situation.
- Contact Your Lender: The first thing you should do if you’re struggling to make mortgage payments is to contact your lender. In some cases, they may be willing to work with you to modify your loan or establish a repayment plan.
- Seek Legal Advice: Consider seeking the advice of a foreclosure attorney who can explain your options and help you understand your rights. They may be able to help you negotiate with your lender, file for bankruptcy, or take other steps to avoid foreclosure.
- Consider a Short Sale: If you owe more on your mortgage than your home is worth, a short sale may be a good option. This involves selling your home for less than you owe on the mortgage and having the lender forgive the remaining debt.
- Look Into Government Programs: There are a variety of government programs available to California residents facing foreclosure, including the Keep Your Home California program and the Mortgage Reinstatement Assistance Program.
- Work With a Real Estate Investor: A reputable real estate investor like Bridgehaven Homes can potentially help you avoid foreclosure by negotiating directly with your lender to buy your home and cash you out on any equity that you have.
Remember that foreclosure is a serious situation that can have long-term consequences. It’s important to take action as soon as possible to explore your options and potentially avoid foreclosure.
If you’re currently facing foreclosure and need to sell a property near Sacramento, please let us know. We will take care of all of this for you!
We buy houses in Sacramento, CA like yours from people who need to sell fast!