subject: Executing California Foreclosures Today [print this page] If you have tried to purchase a house in California, you have encountered an instrument known as a deed of trust. This deed involves three parties; the borrower, the money lender, and the neutral third person who gets foreclosure rights if ever they arise. This is the basic tool used with regards to CA foreclosures.
In a deed of trust there is also a clause empowering the third party to get the rights to implement the collection of the entirety of the debt. This means that the third party has the authority given by the lender for him to sell your property in the event that you default on your debt payments and face foreclosure.
The entire process of foreclosure begins once you fail to meet your mortgage payments. This process involves the lender repossessing the house in order to try and recover their initial costs on the debt. The lender can either sell or occupy the home but in both cases of foreclosure they would ask you to vacate the premises.
If what you have agreed upon was a non-judicial foreclosure, the trustee will need to fulfill certain requirements before they can sell the property. Contrary to how it sounds, this is actually a pretty fast and simple process. It is not necessary for the trustee to get a court order before they can ask you to vacate or any order from the court before they can sell the property. This kind of foreclosure happens if there was no power-of-sale clause in the deed of trust.
In the absence of a power-of-sale clause in the loan document, judicial foreclosure is permitted in California and involves the court's final judgment of foreclosure. The property is then sold publicly; a recorded document is issued in the interest of public notice that the property is being foreclosed upon.
The borrower can reclaim the property after foreclosure sales, if the payment is made upfront which includes the sum of the unpaid loan in addition to the cost procured in one year after the foreclosure sale. That is unless the original lender included the full price bid. In that instance, cost procured is calculated for the period of three months, only.
The important thing for you to know is that the moment a legal action has been filed against you, even if it is on foreclosure, it stays in your legal records. Your credit evaluations will also take a hit for at least the next couple of years, meaning that it will be very difficult and expensive to get a home loan during this time. In fact, it might even be impossible. Any other loan and credit facilities that you have will also be impacted.
I hope this article has helped you to understand how foreclosures happen, especially in California where the law is very strict about payment of mortgages. The best way to avoid this event is to make sure that you are able to make your payments at the time that you agreed to pay because once you fail to do so, you can face very serious consequences. None of us want to have to undergo the emotional and mental stress that having your house foreclosed upon can bring. So make sure you are able to pay before agreeing to take any loan.
