With many of the subprime and "risky loans" equating out to higher levels of default and foreclosure in California, there are many entertaining the possibility of "finding a great deal" and learning more about the foreclosure process. I would like to take an opportunity to bring some light to the topic. Certainly, this is not a complete guide to foreclosures and should not be treated as such. Rather, this is a great start towards understanding the process and things to take into consideration, when going through or entertaining a foreclosure.
First and foremost, I want to stress that this is a time of distress for the homeowner(s) that are having foreclosure proceeding pressed upon them! The process is lengthy and expensive. Banks don't want to take people's homes and they are not in the business to do so. Although there are a few homeowners that could certainly care less about making their mortgage payment on time and willfully "walk away" from a house, the large majority are homeowners that have/had good intentions of making good on their mortgage payments. For one reason or another, they simply got into a bad position or went in "over their heads." Life happens, things change and making the right decisions for such individuals is critical during the foreclosure process.
I also want to emphasize that, during such times; there are laws to protect homeowners from savvy investors and uneducated individuals, attempting to take advantage of a person's "bad situation!" Know that laws that impact Notice of Default and Foreclosure rights and proceedings in California. There is a strong need for fair practices in dealing with such homeowners and avoiding the "shark" mentality. People make irrational decisions daily when faced with tough decisions. Recognizing that there is a right way of going about things should be practiced at all costs.
I would recommend visiting the NARHRI website at: http://narhri.org/ to learn more about pending and newly effected legislation for California foreclosures! The following description of NARHRI comes directly from their website.
The National Association of Responsible Home Rebuilders and Investors (NARHRI) is a Washington, D.C.-based association representing independent real estate investors, state real estate investor clubs, real estate speakers, and corporations with interests in real estate investing. NARHRI's goal is to unify honest, professional investors and protect consumer interests, while at the same time defending the industry from over-zealous legislative and regulatory proposals. NARHRI's national network of lobbyists educate investors, lawmakers, government officials and the media about the benefits of the industry and the best practices for weeding-out rogue investors.
John P. Grant
National Association of Responsible
Home Rebuilders and Investors
You can also contact the Attorney General's Office if you have questions, comments or concerns as a homeowner going through the foreclosure process or as a person making inquiry to a foreclosure. Here is that information:
Attorney General's Office
1515 K Street, Suite 511
P.O. Box 944255
Sacramento, CA 94244-2550
Ph: (916) 445-9555
Civil law division: (916) 324-5431
I also highly recommend that you visit the Official California Legislative Information website at http://www.leginfo.ca.gov/calaw.html and search out the Civil Codes section for the following topics:
Civil Code Section 890 et seq. - Rent Skimming
Law which regulates owners from collecting rent, then not paying on their deed of trust.
Civil Code Section 1695 et seq. - Home Equity Purchasing
Law which regulates buyers of defaulted houses in California.
Code Section 2924 - Trustee's Sale Procedure
Law which regulates the Trustee and it's procedures when handling a foreclosure.
Civil Code Section 2945 et seq. - Foreclosure Consultant
Law which regulates the buyers' representatives of defaulted houses in California.
California Foreclosure Summary:
Yes, most common
Deed of Trust, Mortgage
Right of Redemption
Yes, judicial foreclosure only
Yes, judicial foreclosure only
111 days or more
Judicial foreclosure in California is rarely used, and only in the absence of a power of sale clause in the loan document or when the lender is seeking a court order for a deficiency judgment. The lender must sue the borrower to obtain a decree of foreclosure and order of sale. The court may also order that the borrower has up to one year to redeem the property.
Non-judicial foreclosure is the most common form of foreclosure in California. This process is used when there is a power of sale clause authorizing the lender, in the event of default, to sell the property to satisfy the loan balance. If the power of sale clause includes the time, place and terms of sale, then that procedure must be followed. If not, the process is as follows:
A Notice of Default is recorded with the county in which the property is located when a borrower fails to make a loan payment. A copy of this Notice is sent by certified mail to the borrower within 10 business days of recording. The borrower has 90 days from the date of recordation to cure the default.
If the borrower fails to cure the default, a Notice of Sale is recorded. This Notice states that the lender or trustee will sell the property at auction in 21 days. This Notice is also sent certified mail to the borrower. It is also published weekly in a newspaper of general circulation in the county for three consecutive weeks prior to the sale date. The notice is also posted on the property, as well as in a public place, usually at the county courthouse.
The Trustee Sale Auction is held as a public auction at the time and place designated in the Notice of Sale, and conducted by the lender's representative. The successful bidder must pay immediately with cash or cashier's checks in the full amount of the bid. The successful bidder receives a trustee's deed on completion of the sale. The lender usually bids in the amount of the balance due plus costs. If no one else bids, the property reverts to the lender.
The borrower has no right of redemption, and deficiency judgments are not allowed in non-judicial foreclosure!
Oak Valley Mortgage
2006 Chico Assoc. of Realtors Affiliate Chairman
"You find the perfect home, we'll find the perfect loan!"