May 09, 2017
California Residents: What to Consider After Your Sale Date is Set
in Foreclosure and Bankruptcy, Foreclosure Law, JT Legal Group Blog
"My Sale Date is Set, Now What?"
Owning a home can be a milestone for many people. Having your own property is like having your own personal landmark that family and friends can visit and even remember you by. Having such an important asset entails a lot of care and requires a consistent, responsible mortgage. Most homeowners do not pay the entire amount of the property, but rather take a loan; this is the mortgage. Paying off a mortgage can be incredibly exhausting, stressful, and time-consuming. Considering mortgage schedules can range anywhere from 10 – 40 year installments, the homeowner must be incredibly consistent with their monthly mortgage payments. If a homeowner misses these payments, they can go into foreclosure. After a homeowner receives a sale date notice from the court, he or she must catch up on their mortgage payments immediately or fall into a foreclosure nightmare.
Understanding how many payments were missed, the penalties, and arrears may be a good starting point to figure out how much is actually owed. The amount of time you have left on your home’s sale can be quickly determined by evaluating how many payments you have missed, when, and how you were confronted. The following is general information on the HBOR and California State Laws:
- 1st Month Missed Payment: After missing your first payment, it would be customary to receive a notice from your lender via email, letter, or phone call (or all three).
- 90 Days After Missed Payment: During this time, it has become completely opaque to your lender that you are in debt and in process of losing your home. When reaching this stage, you will receive a “Notice of Default” from the court, or your lender, notifying you that they have filed your property account as under default. It’s mandatory for lenders to notify you within 10 days that they have filed your home as default. To say the least, this notice indicates that you must bring your mortgage to a rehabilitated standing. If you fail to indemnify the lender by the specified date, your lender may see this as an acceptance to begin the foreclosure process.
- 180 Days After Missed Payment: After receiving the “Notice of Default,” your lender allows you 3 months to attempt to get your loan as current as possible. Getting your loan “current” indicates paying off all missed monthly mortgage payments, additional fees, all applied property taxes, and the homeowner’s insurance. If within the time of these 3 months you are unable to bring your mortgage to a current standing, a “Notice of Trustee Sale” will be issued. This notice tells you, the homeowner, that the bank can now set a date for the auction of your home.
- 200 Days Later, Auction Day: After 20 days, the Notice of Trustee Sale has been issued, the bank can set a day for auction. At this point your home could either be postponed from sale for up to a year, or sold immediately to the highest bidder.
Most mortgage companies begin the foreclosure process on homes within 3 to 6 months after the first missed mortgage payment and apply late fees in as short as 10 to 15 days after. 30 days into debt now defines the homeowner at a stage of default, causing the foreclosure process to accelerate greatly. As this process begins to emerge, it’s highly suggested one should communicate with their lender and establish what to do next, how to do it, and why you need to do it.
Types of Foreclosures
Enrolling into a state of Default can be a very difficult hardship to go through. Shortly after this state of default, the consumer’s home can now be foreclosed on. In the event of foreclosure, a distressed homeowner may endure one of the two types of foreclosure:
- Non-Judicial Foreclosure: This is most commonly used in California as such sale is used when a “power of sale clause” is found among the property’s deed. This clause authorizes the property’s lender to place the home for sale as collateral should ever the home reach a stage of default from inconsistent mortgage payments. This certain foreclosure process results in the lender forfeiting their deficiency judgment – a court-requested money judgment that distributes the difference divided between the amount the borrower owed, and the amount the property was actually sold for. It’s said most lenders actually prefer this foreclosure instead as it would typically be a faster and cheaper process.
- Judicial Foreclosure: Unlike the Non-Judicial foreclosure, the Judicial foreclosure process requires a verified court order to foreclose the property. This foreclosure type also allows the lender to issue a deficiency judgment against the borrower. Although this may seem unfair, the borrower has the opportunity to redeem the property again by purchasing from the bidder at the auction for up to one year after the property’s sale has been made. With these given elements, it’s no wonder this type of foreclosure is found rare in California.
What to Do Next
Once your property has reached the point of entitling a sale date your options may be less, but it’s better than having no other option at all. Don’t be encouraged to give up so soon, you can still go through a “redemption period” in trying to gain back your home. Fighting for your home can be time-consuming and sometimes aggravating. To lift some stress off your shoulders, it may be beneficial to you to consult with an experienced foreclosure attorney. Not only is the attorney experienced and well-informed of the newest, and ever changing property laws, he / she is a professional that will defend your values and property to the fullest extent possible. Apart from these elements, the attorney can help you get your home back specifically by:
- Short Sale
Short Sale: When the property’s selling proceeds amount to less than the debts secured by liens against the property, the home is then eligible for re-sale, only if all lien holders are willing to accept less than what is originally owed. The negotiation can be set between the lender and the homeowner’s choice of representation, which is why it is best to engage with a JT Legal Group Foreclosure attorney. Our trusted attorney can help assist with the process and discuss the possibility of redemption or sale with the lender. Banks are typically more inclined to permitting a short sale as they are faster in process and less expensive for the borrower than an actual foreclosure.
- Foreclosure Defense Litigation
Litigation is taking your case to court. In real estate litigation, you can file a lawsuit against your bank and any other parties involved for illegal acts that were committed against you. A few examples might be that your bank failed to provide a permanent modification when you successfully qualified for a permanent modification, or the bank foreclosed on you despite saying that they wouldn’t. There are a number of different scenarios that can be litigated, and our experienced attorneys are available for a free consultation to discuss your specific case. Litigation helps you, the borrower, let the bank know that you are serious -- and you demand to be dealt with in a fair and professional manner.
- Pursue Mortgage Litigation
When a case goes into litigation, the case goes into court. Bringing any matter into court is then professionally analyzed, considered, and taken into attention. This might be a particularly great way to fend for your home if you strongly believe that you were involved in a false or untrue purchase / mortgage process. For example, if your bank failed to provide you with a permanent modification when you clearly qualified for it, or if the bank foreclosed on you when they noted they wouldn’t, then you would have a good case on your hands. Taking the matter into litigation displays your responsibility, amount of care, and quality you are investing into the property.
- Chapter 7 Bankruptcy
If you are looking at various bankruptcy options, you have no doubt encountered the possibility of filing for Chapter 7 bankruptcy relief. Unlike some of the other chapters, Chapter 7 bankruptcy does not include a repayment plan — it liquidates all nonexempt assets; and then, after paying those funds to creditors, permanently eliminates your debt.
- Chapter 11 Bankruptcy
Chapter 11 is probably the most infamous form of bankruptcy protection, likely because it is the chapter of choice for businesses and large organizations. Unlike Chapter 13, Chapter 11 does not have a debt limit that can disqualify the borrower from filing. This makes Chapter 11 ideal for companies, which often have well over the amount of debt allowable under Chapter 13.
- Chapter 13 Bankruptcy
If you are considering filing for bankruptcy protection, you probably have started looking into Chapter 13 bankruptcy as one potential option. Chapter 13 differs from Chapter 7 in some very important ways, and it's strongly advisable to consult with a qualified bankruptcy attorney before deciding on the best path for your unique situation. Below are some facts surrounding Chapter 13, in particular.
Retaining with an attorney here at JT Legal Group will not only build up your chances of redeeming your home back, but also will assure you that you (and your case) will be defended and protected with to the fullest, and best, extent possible.
Read More Litigation Tactics with the Homeowner Bill of Rights (HBOR)
Foreclosure Defense Attorney
Armine Singh is the Managing Attorney at JT Legal Group. Armine has defended hundreds of homeowners from foreclosure through successful real estate litigation defense. settled homeowner association disputes, provided in-house counseling to investment companies on acquisition and investment in distressed real properties, as well as completed successful unlawful detainer actions.