In California we have non judicial foreclosures for homes that are foreclosed on. Compare that to Hawaii that has both Non Judicial and Judicial and you will quickly realize how fortunate we are. In plain english that means that because we have a non judicial foreclosure process, it does not require the lender to suit you for non payment and require you both to go to court. Instead, the lender files suit against you through the use of a Notice of Default which is sent to the homeowner who is obligated to the debt (the person who took out the loan and signed the loan papers with the lender). By the way, non judicial foreclosure is much more affordable than a costly judicial foreclosure.
When you took out a loan to purchase your home or to refinance it, in the Note (not to be confused with the Deed of Trust) has language that states your terms of agreement, including your terms such as interest rate, monthly payment, due dates, late payment penalty's, and if the loan is delinquent by 30 days or more your foreclosure process i.e. notice of default etc. It even has the trustee that will serve your notice of default also known as N.O.D.
Once you are 30 days late, the lender has the right to file a notice of default, this is a 90 day period where you can redeem the loan by bringing it current and get the home out of foreclosure. If the loan continues to be delinquent, then after the 90 day period is over, the lender can file a Notice of Trustee Sale, which is typically about 25 days long and on the 25th day the home is sold at the Trustee's Auction Sale to the highest bidder. Typically the opening bid is whatever the outstanding loan balance is as of that date. In order to purchase at the court house steps Trustee Auction Sale you have to pay the entire winning bid amount as is, all inspections need to have been completed and you need to be satisfied with the home as is. You are normally competing with investors in this arena.
Once the home is sold at auction or if it goes back to the bank a Trustees deed upon sale is recorded. If the bank takes back the home, it then prepares the home to go back on the market as a Bank Owned Property also known as an REO which stands for Real Estate Owned. The Bank calls their REO Broker who prepares the property for market including evicting existing inhabitants.
I'll be writing soon on the REO process so stay tuned and be sure to circle back and visit me again!
Oh by the way who do you know who would love to sell their home? Just contact me with their number, I would love to help them for you!
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