subject: Reasons for California Foreclosure Postponement [print this page] Reasons for California Foreclosure Postponement
In California, foreclosure sales may possibly be postponed per CA Civil Code 2924 g (c) (2). The factors for postponement are included in 2924 g (c) (1).
The primary postponement factors consist of:
CALIFORNIA FORECLOSURE POSTPONEMENT - MUTUAL AGREEMENT
The most common cause for postponement is because the financial institution agrees to postpone the sale. The financial institution may be responding to a homeowner requesting a little much more time to sell the property, or the loan company may be working with the homeowner on a forbearance or loan modification. Homeowners should be informed that when they enter a forbearance agreement, the foreclosure procedure continues; if they miss an agreed upon payment, the property can be sold on the next scheduled sale date with no further notice.
CALIFORNIA FORECLOSURE POSTPONEMENT - BANKRUPTCY
When a homeowner files for bankruptcy safety, it puts an "automatic stay" on the foreclosure and on the assortment of all other debts. The bankruptcy does not end foreclosure, as many believe. Instead, it simply delays the purchase of the property till the homeowner resolves the debt. In numerous instances, the loan company will acquire approval from the bankruptcy court to carry on the sale. This is called an "order granting movement for relief from stay." This motion is granted because the financial debt is "secured" by the property, and the lender has the right to take the security (the property) if the owner does not make the payments as agreed. Bankruptcy is only an powerful instrument against foreclosure if the homeowner will have enough revenue to pay their house loan and make up previous due amounts once the bankruptcy program is completed.
CALIFORNIA FORECLOSURE POSTPONEMENT - TRUSTEE'S DISCRETION
This is when the trustee tends to make a decision to postpone the sale. The most typical reason is that they are unable to reach the loan company for sale instructions.
CALIFORNIA FORECLOSURE POSTPONEMENT - OPERATION OF LAW
This reason is fairly uncommon, but is used when a court orders the postponement of the sale. The most probably factors are exactly where there is a plausible allegation of fraud in opposition to the lender, or there are questions of material fact concerning the lender's right to foreclose. This reason is gaining recognition with bank loan audits to determine compliance with federal TILA and RESPA laws.
Obama's New Program To Cease Foreclosures
Modifications had been announced March 26th to the Obama initiative to gradual or stop foreclosures by way of the 'Making Properties Affordable' scheme.
This follows the apparent failure of the Treasury Department's flagship 'Home Affordable Modification Program' (HAMP), which has so far efficiently processed less than 1% of the 1.7 million probably eligible cases. HAMP has had a negligible impact on stopping forecloses in California.
"The new plan to cease foreclosures has measures aimed at the unemployed. To qualify, the lender has to play ball as well by reducing the mortgage amount by at least 10%; so it is a government backed 'short sale' initiative to a degree. For much more details see this Washington Post guide."
In several instances in California, a reduction of 10% in the principal debt will not correct the unfavorable equity. That is, even after mortgage modification, the home loan financial debt will be greater than the value of the home.
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