When a property owner falls behind or is unable to make his/her mortgage payments on a property, the lender can choose to move forward with a foreclosure. In simple terms, this is the legal process that lenders follow when they want to reclaim a property or attempt to recoup their losses.
The foreclosure process can be lengthy and complicated. To help homeowners and other property owners navigate these stressful situations, we’re offering a quick and simplified overview of how the foreclosure process works in California. Don’t forget that for more in-depth discussions and tailored legal advice, you can always reach out to the experienced California real estate attorneys at DiJulio Law Group.
There are many questions thrown around all asking the same thing: How long will it take to buy a home? The answer obviously depends on the contract you signed when you agreed to purchase. The day you are able to move in will be specified in the contract, either stating the closing date or the number of days from signing. Typically it takes between four and ten weeks, but it varies based on location.
One way to make the buying process faster is by considering the purchase of a foreclosed home. Since there is next to no room for negotiation on foreclosed houses, and you have to move quite quickly before another person or investor scoops your desired property up, the process can be speedy and often less expensive than traditional methods. There are some downsides as well, so let’s take a look at the pros and cons of buying a foreclosed home.
Pro: Once you find a home you like, the process goes very quickly. Since the occupants are already moved out, you might be able to move in inside of a week.
Con: Preparing for this rapid-fire transition takes time. You need to have a financial backer ready with a loan, a realtor or real estate attorney ready, and the ability to pull the trigger on a house you like without hesitation.
Pro: Buying a foreclosed home can be quite cheap compared to the residential real estate market as a whole. This is because the banks that loaned money to the previous occupants haven’t yet been reimbursed for their loan, so they want to sell the house fast to get back what they’re owed, and maybe a little more for themselves. They are not so worried about huge profits, but will not sell at a loss.
Con: There are essentially no negotiations. The price is the price, and very rarely will it drop. This is because the banks need to recuperate their investment, and spending time negotiating would siphon resources away from more important prospects.
Pro: No haggling means you know the price you will pay.
Con:It also means you get the house in ‘as is’ condition. No discounts for necessary repairs.
Buying a foreclosed home can be a great and speedy alternative to shopping the market for months at a time. Make sure to look into personal property law cases and get to know the legal process a bit more with the help of a lawyer. This will ensure you are well prepared for owning a foreclosed property.
Typing the words ‘foreclosure process’ into Google is something no one should have to do, but the harsh reality is this: one out of every 200 homes will be foreclosed upon.
If you feel like you haven’t been given proper notice, then check your state laws. Most states have strict regulations on what constitutes a proper eviction or foreclosure notice. Likewise, if you have not received ample opportunity to pay ahead of the property’s foreclosure sale, you might have cause to challenge the sale. But what if you have received a proper foreclosure notice? Then it is time to talk to a real state lawyer immediately.
While your lawyer will be able to advise you on your specific legal situation, you may also benefit from a deeper understanding of the foreclosure process, which can be stressful and downright terrifying.
The foreclosure process
Step 1. Notice of Default: This is the official notice that the creditor has defaulted on the mortgage loan. In this letter, you will get information about how much you owe, how long you have to pay, and what will happen if you can’t. If you pay the amount due in the time allotted, your house will remain yours. If not, you move to step two. Before you pay anything though, run the document by your attorney. He or she will work toward finding out whether there is anything that would delegitimatize the notice of default, such as failure to comply with state real estate laws.
Step 2. Assess your options: Even when you can’t afford to pay what you owe, you still have options, but they aren’t great. If the foreclosure notice holds up against the law, you can try re-negotiating your mortgage payment plan via a loan modification. This can be tricky, but your lawyer can help you through the process. The second option you have is exchanging the deed for the balance owed. Third, you can short the property for less than the loan. You will still be responsible for the remaining balance, however. These options are best explored with the guidance of a real estate attorney.
Step 3. The House Goes Up For Auction: After the deadline to repay has passed, you will be expected to vacate the premises, and fast. Your creditor, in hopes of recuperating your unpaid mortgage, places your house on an open auction. It is common for creditors to only accept cash at these auctions, so while they often don’t make a huge profit off your house, the bidding usually starts at what you owed.
In the end, foreclosure is never an enjoyable process, but if you get a lawyer you will be on a much better footing for the fight to come. To find out more about past personal property law cases and their outcomes, ask your lawyer or consult the public records in your area.
Getting through the foreclosure process can feel like a battle, especially when you’re working with your real estate attorney to get yourself out of foreclosure. However, once you’ve made your way out of the foreclosure process, it can be even more difficult keeping yourself from being swept back into it.
Some homeowners are able to avoid foreclosure by reinstating their mortgage. This can be done by making a permanent loan modification. However, even with a loan modification, some homeowners may fall back into the trap of being unable to make mortgage payments, therefore sending them right back into foreclosure.
How you can avoid a repeat foreclosure
Called “repeat foreclosure” under real estate law, this problem has been an increasing blot on the eye of the housing market since the beginning of the housing crisis. In 2013 alone, there was a foreclosure in one out of every 96 American homes.
Falling into foreclosure once is enough for any homeowner to never want to do it again. Fortunately, there are ways you can reduce your risk of falling back into foreclosure.
- Don’t continue to live in a home you can’t afford
One of the main causes of foreclosure is that a family has purchased a home that isn’t in their budget. By staying in a costly home that has already driven you to foreclosure once, it may be in your best interest to find a home that suits your current financial needs. Consider a short sale, which will keep you involved in the process of your home’s sale and will give you some control.
- Don’t continue to live in a home you can’t afford
- Save money during the time your mortgage payments are halted
In order to avoid a wave of mortgage payments later, you may have difficulty affording, put aside the money you would be paying into your savings account or elsewhere. This will keep you from having to dig deep into your pockets to find the money later once the payments begin again. It also provides you with a safety net should something go wrong with your finances later on.
The foreclosure process is never something to look forward to even with the help of a real estate lawyer. This is especially true for those homeowners who have already been through it once. Consider following these tips in order to keep yourself from falling into a repeat foreclosure. For assistance and more information regarding your repeat foreclosure and what you can do, contact the law offices of DiJulio Law Group today.