Foreclosure is one of those words in Real Estate that can spark so much emotion! Fear. Anxiety. Exhilaration. It’s a loss. It’s an opportunity. It’s wild how much attention this one word can generate but what do you really know about foreclosure?
FIRST THINGS FIRST. Foreclosure is a legal process and if you happen to be in foreclosure you need to get professional advice. Legal advice as well as Real Estate advice. I am NOT an attorney and what I have written here, and what I provide, is NOT legal advice. If you need an attorney to assist you in this process, feel free to contact me and I am happy to refer you to an attorney who can assist you through this difficult time.
Okay, let’s begin with the basics. Foreclosure is a legal process whereby the lender can take possession of the property that was used as collateral for a loan. In simple terms, you don’t make the mortgage payment the lender takes the property. It sounds like a pretty simple process but it’s not as simple as it seems.
In California there are two ways a lender can foreclose on your property. There’s a judicial foreclosure and a non-judicial foreclosure. Judicial foreclosure is a process where the lender takes you to court and has the foreclosure ratified in court. It’s lengthy and costly but there are some situations where it makes sense why a lender would take this route.
On the other hand, there is the non-judicial foreclosure. Like a judicial foreclosure this process is also lengthy and expensive but unlike the judicial foreclosure process the lender does not have to go to court to take the property from the borrower. In a non-judicial foreclosure process the lender files a Notice of Default against the property. This is a public document letting the world know that the next step will be a Notice of Sale. Typically it’s 90 days from the filing of the Notice of Default to when the Notice of Sale is filed but since The Great Recession lenders have been more willing to assist borrowers through this difficult time. This is why sometimes you don’t see a Notice of Sale filed for several months after the filing of the Notice of Default.
A Notice of Sale is recorded against the title of a property when a lender is going to proceed with a foreclosure against the property. The Notice of Sale is filed 30 days prior to the sale date. In addition to recording these documents against the title to the property the lender is required to post a notice on the property as well as advertise the foreclosure sale information.
Foreclosure sales are typically held at courthouses and are usually on the courthouse steps, not in the courthouse itself. The sales are auction style and the winning bidder has to pay for the property with cashiers checks. The winning bidder then gets a Trustees deed to the property and now you own the property!
This blog makes the process sound simple and while it’s pretty straightforward this is not for the faint of heart. There are several pitfalls related to this type of transaction. If you are considering purchasing property at the courthouse steps let’s talk! I may be able to assist you with how to proceed
Giuseppe “Joe” Napoli
CA DRE Lic. No. 01279689
ReMax Top Producers
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