Foreclosures

Real Estate agents have several terms for a foreclosure. Terms such as REO, Real Estate Owned and Bank Owned are very common and all mean foreclosure.

Can you prevent a foreclosure?

Yes, there are several options available to you to help avoid foreclosure. We recommend you call your bank and see what options they might be willing to provide, such as a loan modification in which the bank can help reduce the interest rate, principle or both. There are government programs such as make a home affordable. You can possibly do a deed in lieu foreclosure or even a short sale.

Should you hire a professional to help?

There is a lot of negative publicity for companies that try to help you modify your loan or provide you options. We recommend you avoid using a company and make the calls yourself. In the event that you should hire someone, make sure they do not charge any up-front fees. Be diligent and do your homework. Do not give your hard earned money away. A lot of companies will take your money and provide you with no service and do very little to help you. Get references and call them. Here is a free resource that may help you (makinghomeaffordable.gov), they have a free hotline and will answer your questions without asking you for any money.

What is the process for a foreclosure?

In California, the state allows both judicial and non-judicial foreclosures. 99% of foreclosures are done utilizing the non-judicial foreclosure process. What this means is it can take as little as 90 days for a bank to foreclose.

The non-judicial foreclosure process has a "power of sale" clause in the mortgage or lien contract. With the clause, the lender or their representative (trustee) may sale the home once the guidelines are met.

A notice of sale must be:

1. Recorded in the county where the property is located at least fourteen (14) days prior to the sale
2. Mailed certified with a return receipt requested, to the borrower at least twenty (20) days before the sale;
3. Posted on the property itself at least twenty (20) days before the sale
4. Posted in one (1) public place in the county where the property is to be sold.

The notice of sale must contain the time and location of the foreclosure sale with the property address, the trustee's name, address and phone number stating the property will be sold at auction.

 The borrower has up until five days before the foreclosure sell date to cure the default and stop the process.

What happens if the property does not sale at auction?

The property becomes the possession of the lien holder (bank) and in the event you have yet to move out, they will either offer you cash for keys or start the eviction process. In some rare cases they will negotiate a rental agreement for you to live in the home until the property is sold. It now becomes an asset of the banks (called Real Estate Owned "REO") and assisting to an asset manager. This is now where Real Estate agents will list the property for sale.

Note: All information provide is considered to be accurate, but not guaranteed.