Understanding the foreclosure process in CA is essential if you’ve been notified that your home is being foreclosed or has entered the pre-foreclosure stage.
What is foreclosure anyway?
Foreclosure occurs when a lending entity, like a bank, takes back its property after the homeowner has failed to make his or her mortgage payments. It’s a serious legal process that can have massive consequences on the homeowner’s credit. In this guide, we’ll walk you through the basics of foreclosure and discuss some preventative options you may have so you can begin understanding the foreclosure process in CA
The Basic Stages of a Foreclosure
Foreclosure works differently depending on which state you live in, but there are two ways that states use foreclosure: as a judicial sale or a power of sale. In each scenario, foreclosure often doesn’t lead to a court appearance until after 3 – 6 months of missed payments. At this point, a lender will send out plenty of notices to let you know that your payments are overdue. If you have specific questions about understanding foreclosure in Stockton CA, feel free to connect with us by calling (209) 743-0602. Let’s take a look at the two ways that states use foreclosure:
Under Judicial Foreclosure:
In judicial foreclosure, your mortgage lender must file suit in the court system. You’ll get a letter from the court that demands payment, and if the loan is valid, they’ll give you 30 days to avoid foreclosure by bringing the payment to the court. In some circumstances, you can extend this deadline.
What happens if you don’t bring the payment within 30days? Well, the lender can request that your home be auctioned off. Once a new homeowner buys the house, you’ll be served an eviction notice and forced to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
In the power of sale (or non-judicial) foreclosure, the lender serves you with papers demanding payment. In this case, courts are not required, but if anything goes awry, the process can be subject to judicial review. If you still haven’t paid off the amount when the deadline comes along, a deed of trust is drawn up and control of your property is transferred to a trustee.
At this point, the trustee has the power to sell your property to the lender during a public auction. In this case, a notice must be given to anyone who has an interest in the property. For instance, a notice would go out to any contractors or banks with liens against the foreclosed property since they’re entitled to collect from some proceedings from the auction.
What Happens After a Foreclosure Auction?
Ideally, once the auction is complete, the proceeds from the sale are enough to completely cover the loan. If the sale still isn’t enough, then a deficiency judgment can be issued against you. What does that do? Basically, it’s just the bank telling you to keep paying (even though the foreclosure sale is done) until the loan is covered.
Depending on where you live, your state might limit the amount that a deficiency judgment can ask for, but other states allow the full loan amount to be assessed against the borrower. As you can probably guess, avoiding a foreclosure auction is in everyone’s best interest. A great way to do this is to call up the bank, or work with a reputable real estate firm like us at MCB Homes Inc., to help you negotiate delays or discounts that make payments easier for you.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe. If you need to sell a property near Stockton, we can help you. We buy houses in Stockton CA like yours from people who need to sell fast.
Hopeful you’ve begun understanding the foreclosure process in CA. If you want to sell your home fast for cash? Give us a call at (209) 743-0602 for help selling your house fast or fill out the form to see if your property qualifies for a fast, fair all-cash offer.
Another Foreclosure Resource For Stockton CA HomeOwners: