subject: California Foreclosures: How To Prevent Foreclosure Even If Your Home Is Sold At Auction [print this page] Many states have foreclosure laws that permit homeowners facing foreclosure get their house back, even if it's been sold at auction. If this sounds too good to be true, it's not. These are state foreclosure laws and they care called right of redemption laws.
Following is a general overview of this law in California's and how it can help you stop foreclosure.
Mortgage Foreclosure Law: What is a Right of Redemption?
Before we get into the specifics of California foreclosure law, let's first discuss the general concept of this law.
When a home is foreclosed on by the bank, there's a certain amount of time that a homeowner has to purchase their home back. This period of time is known as the property owner's "right of redemption." And, a property owner can exercise this right - even if their home as been sold at auction (within certain limits).
Now that you know what right of redemption laws are, let's turn our attention to how they can help you stop foreclosure in California.
California Foreclosure Law: The Foreclosure Process
To understand how right of redemption laws can help you prevent foreclosure, we must first tackle the foreclosure process in California. There are basically two types of foreclosure in the United States - Judicial Foreclosure and Non-Judicial Foreclosure.
How Do Right of Redemption Laws Help Homeowner Stop Foreclosure in Foreclosure
In California, this law is a little convoluted compared to other states. For example, there's usually one defined period in which a homeowner can act to get their home back. In California, this is not the case. It can be 3 months or 12 months. How long the period is depends on whether or not the property sells for enough to pay off the existing loan.
California Foreclosure Law: When the Right of Redemption Period is 3 Months
If a home sells for enough to pay off the balance of the loan, the redemptive period is shortened to a mere three months. Where does this time period come from? When a homeowner is served a Notice of Default (NOD), the borrower has 90 days to bring their loan current after the receipt of it.
And this is exactly what makes California law convoluted.
The 90 days a borrower has to bring their home loan current is considered the redemptive period. Many real estate legal experts point out that this is not within the true spirit of the law, that it's not a real statutory redemption period. But, it is in California.
California Foreclosure Law: When the Right of Redemption Period is 12 Months
If a home sells for enough to pay off the home loan, the right of redemption period is 12 months.
Foreclosure Cleanup: A Sizzling Small Business Opportunity
Many savvy entrepreneurs are capitalizing on the home foreclosure crisis in California by starting foreclosure cleaning businesses. It's the type of business that thrives no matter what the real estate market is doing. Why? Because as long as real estate is bought and sold, it will need to be cleaned and maintained (eg, grass cut, locks changed, windows boarded up, etc.).
