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Are you facing foreclosure? |
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If you have been
served a Notice of Default, your mortgage
company has already begun the foreclosure
process. The foreclosure process varies from
state to state. Since understanding the
foreclosure process is not something that is
high on the average citizen’s to-do list, it
is critical that you talk with someone
within California, so you know the
information you are receiving comes from
someone experienced with the California
foreclosure process. |
The California Foreclosure Process |
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Notice of Default: |
The California
Foreclosure process starts with the
homeowner being served a Notice of Default. This notice may be served anywhere from one
week to several months after the first
missed mortgage payment. The Notice of
Default is the official beginning of the
foreclosure process.
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Notice of Trustee’s Sale: |
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The second step of the foreclosure
process is a Notice of Trustee’s Sale.
Ninety days (or more) after the Notice of
Default has been served, the Trustee must
file a Notice of Trustee’s sale with the
county and publish the sale in your local
newspaper. On the sale date, your home may
be sold at public auction. Generally, the
starting price is for the loan amount plus
the costs of foreclosure. If no one bids on
the home, the lender becomes the new owner
of your home.
In California, the foreclosure
process usually takes about four months. So
this essentially means, you have four months
to explore your options. That isn’t much
time in a slow real estate market! |
How can you stop the foreclosure process? |
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| Now that you know how much time you have,
you need to consider your options. You
really have six potential ways to stop
foreclosure and keep that blemish off your
credit report.
• List your home.
You can
list your home with a realtor or try to sell
it on your own. If you have enough equity in
your home to pay off your loan, pay the
realtor, and cover the escrow fees, this
option should be considered. If you plan to
sell your home, get started right away as it
normally takes at least 30 days for escrow
to close after a buyer has decided upon your
home.
• Refinance your loan. If you are not
too far behind in your payments, you should
call a mortgage broker and see if you can
refinance your loan. However, once you get
more than three payments behind, most
lenders will want a minimum of 35% equity in
your home to refinance.
• Arrange a Special Payment plan. You may consider contacting
your lender and asking for a Special Payment
Arrangement. Often if you can pay a portion
of your arrearage (overdue payments), the
lender will work out a payment plan for you
to catch up over the next few months.
• Ask for a Forbearance Plan. If you are behind in
payments due a natural disaster or a
temporary setback (family death, terminal
illness, disability, et cetera), you may be able
to work out a forbearance plan with your
lender. With a forbearance plan in place,
the lender will reduce your month payment
for a short period of time, and add the
shortage amount into the loan. Your loan,
however, must be current in order to request
a forbearance plan.
• Offer a Deed in Lieu. You may offer the lender the Deed in Lieu of
Foreclosure which essentially means you
give your home to the lender before the
lender forecloses on you. This saves the
lender the fees required to go through the
foreclosure process; however, the Deed in
Lieu of Foreclosure will be on your credit
report for seven years. When you try to buy
another home, it will be treated just as a
foreclosure.
• Sell Today!
Finally, you can
sell your home to an investor who will close
the deal as quickly as possible to insure
that the home is sold before it goes up for
public auction. You avoid realty fees, avoid
foreclosure, and save your credit report so
that you can buy another home when you are
ready.
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Rock Investing is Ready to Buy Your Home |
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Even if you owe more than your home is
worth, we still want to talk to you about
purchasing your home. If
you’d like to explore this option, please
contact us at 916.765.3804.
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