Unexpected expenses, job loss, medical issues, etc. can lead to missed mortgage payments, and too many missed mortgage payments can lead to what’s known as foreclosure. There are two kinds of foreclosure: judicial foreclosure and non-judicial foreclosure. Foreclosures are handled differently from state to state, and in California there are laws which govern the schedule for foreclosure and other important procedures.
One important rule to be aware of in California is the "one-action" rule, which states lenders must pursue only one course of action against defaulting borrowers. But you can avoid all of this by choosing to sell a house fast in southern California. You’d avoid a hit to your credit and numerous hassles as well. But for now, let’s see how foreclosure works in the Golden State.
Step 1: Your Lender Contacts You
At this point, numerous mortgage payments are past due, or delinquent, and your lender is wondering where their money is. You can bet that your lender will write to you frequently inquiring where your mortgage payments are. California law mandates that lenders must get in touch with clients facing default 30 days before issuing a notice of default to discuss their options for resolution. This contact can take place over the phone or in person. Consider this the lender's initial effort to assist you.
Step 2: Getting A Demand Letter
The lender will also communicate with you less officially and send a letter that’s distinct from the previous late payment warnings or phone calls; this is a breach or demand letter. Although getting this letter in the mail can seem quite nasty, the lender needs to send out this letter, as they need to be prepared in case you have to default on your mortgage.
Step 3: Notice Of Default
A notice of default typically won't appear for around four months in California. And according to federal law, your mortgage lender must hold off notifying the county recorder's office of your default until a payment is 120 days past due. An official record of the non-payment will be created, and this will serve as the default notice. Within 10 business days of this being created, a copy will be mailed to you. You'll also receive a second copy in the mail within 30 days. The foreclosure process will formally begin after a notice of default has been submitted.
Step 4: Auction Of Foreclosure
The lender can file a notice of sale if the borrower fails to pay outstanding mortgage payments, but only 90 days after the notice of default was filed. The notice of sale should be delivered to the delinquent borrower by certified mail, and it should include the time and date of the foreclosure auction. Then every week for three weeks straight, information about the auction will be printed in the local newspaper. Eventually, an auction will be held, and at this your home may be auctioned off to the highest bidder.
A Piece Of Advice
If you and your family are facing foreclosure, it’s likely you’re facing stress, worry, and sadness. And to make things even worse, foreclosure can negatively impact your credit score, and the black mark from this can last for seven years. So in order to avoid the adverse effects of having your house sold at auction, selling your home at the beginning of the foreclosure process is a wise move. It’ll be a massive relief for everyone involved if you’re able to sell quickly, and for a fair price, to avoid foreclosure.
Author Bio:
Cash 4 Homes is one of the leading cash home buyers in Southern California, one that works with homeowners who are facing foreclosure. They know this process inside and out, and that’s why they can guarantee seamless cash home sales to homeowners who need to avoid foreclosure. Call them with intent to sell and they’ll make an offer within 24 hours.
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