California Foreclosure Process
RealtyTrac reported that in the third quarter of 2009, 1 of every 136 U.S. homes were threatened by foreclosure (received a foreclosure letter, auction notice, or bank repossession)! They now report that the first half of 2010, 1 in 78 homes are threatened with foreclosure! What was once a relatively rare occurrence is now all too common!
In our current economy, one of the reasons foreclosures are so rampant is because home values have plummeted. In the past, if a homeowner lost a job, or had some hardship where they could not make their mortgage payments, they could sell their home. But when they owe more than the home is worth, they can’t sell!
Fortunately, in these interesting times, foreclosure is not your only option. If you want to keep your home, you can try for a loan modification or a principal reduction. If you want to lessen the impact on your credit and other effects of foreclosure, you can get help and negotiate a short sale. On the other hand, maybe you just need to let go and move on. The foreclosure process may take as little as 4 months, or it may take years!
The bottom line is to be pro-active. Don’t go into denial and ignore the problem. Look at your options and choices (and you do have choices!), decide if you want to fight to keep your home or not, then get some help!
Here is what you may expect with the foreclosure process in California:
- The process starts when you stop making mortgage payments. At this time, your lender may or may not decide to take action. Legally, you are delinquent when you payment is over 30 days late.
- Some time after your payment is delinquent, you will receive a letter stating that the Notice of Default (NOD) has been recorded. This may take 30, 60, 90 or even more days.
- After the NOD has been recorded, you will have a minimum of 90 days in which to pay your lender the back payments and fees, and your default will be cured. Typically you will not hear from your lender during this time.
- After the 90 day “silent period”, you will receive another letter specifying the date the Trustee’s Sale will take place, usually 20 - 31 days after you receive the letter.
- You have until 5 business days before the Trustee’s Sale to reinstate your loan - pay all back payments and fees.
- After the Trustee’s Sale, you may have up to 30 days to live in your home prior to being evicted. However, in some cases, even after the Trustee’s Sale you may still be able to save your home.
Our programs may be able to help you. Time is of the essence! Contact us today!
Note: There will be credit, and possibly tax consequences as the result of a short sale, foreclosure, and possibly other solutions. Please contact your tax advisor for help.