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How To Avoid Foreclosure in California?

We understand that many people need help with avoiding foreclosure. Avoiding foreclosure in California has become easier than it was over a decade ago, prior to the foreclosure crisis, which peaked in 2010. The federal and state laws mainly regulating foreclosure procedures and how mortgage services worked were limited back then. Most times, the laws would favor the servicer. In recent years, federal and state laws have been added to strictly regulate loan servicing, including the foreclosure processes. Today, many laws protect borrowers instead of it being the other way around, as it was in the past.

Present-day loan or lending services are required by law to provide borrowers with what’s called a loss mitigation opportunity to account for each step of the foreclosure process. People who borrow money to buy a residential property will have to initially sign a promissory note followed by a deed of trust, similar to getting a mortgage. The documents help provide homeowners with a couple of contractual rights and be protected by the state and federal laws.

Over the past few years, avoiding foreclosure in California has become easier than it ever was before. Borrowers or those on the brink of being foreclosed have the right to:

  • Apply for loss mitigation
  • Get a preforeclosure breach letter
  • Also, receive foreclosure notices
  • The chance to get current on their loan and stop their home from being foreclosed
  • Get protection if they are in the military
  • File for bankruptcy
  • Pay off the entire loan in order to avoid foreclosure
  • Get all the excess money from a foreclosure sale

All of these points are very important so that you don’t get caught off guard as a homeowner who is currently behind on their mortgage payments. You must understand each step of the foreclosure process in California, starting from missing payments to the final foreclosure sale. It is only after understanding the process you can make the best decision based on your situation and hopefully try to work your way out, saving your home or at least understanding the process, which may not cause as much anxiety.

What Is Pre-foreclosure?

Usually, preforeclosure is the period within which you have been falling behind in payments, but prior to when foreclosure starts. Some people also define the “preforeclosure” stage as one that’s before a foreclosure sale. So, anytime before a foreclosure sale is a preforeclosure, which might not be technically accurate.

During the preforeclosure period, the lender or servicer can legally charge you various fees such as inspection fees and late charges. However, it is the lender’s responsibility to inform you about ways to avoid foreclosure, then send you what’s called a preforeclosure notice, also referred to as a “breach letter.”

What Fees Are Charged During Pre-foreclosure?

Many loans will include a grace period after you miss a payment, and that includes mortgages. The grace period can last for up to fifteen days at most, after which you will be charged a late fee. Then every month that you don’t pay or miss that payment, you are charged a late fee. However, examine the promissory note to find out your late charge amount and the grace period for the loan. You signed the promissory note when initially applying for the mortgage. Your monthly mortgage statement will usually have some related information.  

The vast majority of California deeds of trust will also allow the mortgage company, aka lender, to take the steps needed to protect its interest in the property. That means property inspections will be performed mainly to ensure that the home is appropriately maintained and occupied. Most inspections can be a drive-by, and they are ordered automatically once the loan is defaulted on but cost anywhere from $10 to $15.

A few other types of fees that you might be charged include broker’s price opinions, like appraisals, and property preservation costs, like yard maintenance, abandoned home or maybe winterizing.

Federally Mandated Mortgage Servicing Laws and Foreclosure Protections

The current laws require that the lender contact the homeowner to mainly discuss loss mitigation options. First contact needs to be made over the phone as per the law. Some loss mitigation options will include forbearance, loan modification, and a repayment plan within 36 days of missing out on a payment and then within 36 days of each following payment that’s missed.

The servicer also has to inform the homeowner in writing about loss mitigation options within 45 days of delinquency. Personnel should be appointed to help the homeowner work their way out of being foreclosed. However, there are exceptions to this, especially for people who might have filed for bankruptcy. Also, if you’ve asked the lender not to contact you as per the Fair Debt Collection Practices Act, then they are obviously obliged not to contact you.

Furthermore, US Federal mortgage servicing laws advise against a practice referred to as dual tracking. What this often means is pursuing foreclosure, although a complete loss mitigation application may be pending.

The Importance Of A Breach Letter

Most California deeds of trust also have a provision that mandates the lender to send a notice referred to as a “Breach Letter” to the delinquent borrower or a defaulter before accelerating the loan. The letter mainly gives the defaulting party a chance to avoid potential foreclosure. The letter will help with avoiding foreclosure by offering options to defaulters.

When Does Foreclosure Officially Start?

Many times avoiding foreclosure, means knowing when it will officially start. Under US federal law, the lender can’t officially kick off foreclosure until 120 days have passed and you’re still due on payments, but this too is subject to a couple of exceptions. The 120-day period gives at least, in theory, most homeowners the time they need to submit a loss mitigation application to the lender.

California Foreclosure Process

It is important to remember that if a homeowner defaults on their mortgage in California, the lender has the right to foreclose using a nonjudicial or judicial method. We’ll take a closer look at both these methods below.

How Does Judicial Foreclosure Work?

Generally, a judicial foreclosure will start as soon as the lender files a lawsuit that mainly seeks the court’s permission to allow foreclosure sale. Usually, the homeowner will be sent a written letter with a written response required; if a response isn’t sent back, the lender automatically wins the case. However, if you choose to defend the lawsuit, the court then reviews the evidence to determine if it will or will not allow a foreclosure sale. In the event your lender wins, the judge will order your home to be auctioned by the lender.

Nonjudicial Foreclosure 

If the lender chooses to use what’s called nonjudicial foreclosure, it needs to go through an out-of-court procedure described in California‘s statutes. Once all the steps are completed, the lender can sell the home. In California and many other states, lenders will use the nonjudicial process mainly because it is cheaper and quicker than court litigation.

The Most Common Foreclosure Process Used in California

We already mentioned that the majority of foreclosures in the state are nonjudicial. Now for those who were wondering, below, we’ll go into how they work.

California’s Pre-foreclosure Outreach

California law mainly mandates that lenders contact borrowers, or they should meet specific requirements for contacting you over the phone or in-person 30 days prior to recording a notice of default. The law mandates that lenders contact borrowers to assess their current financial situation, which means that options to avoid foreclosure can be explored.

It is during this initial contact that the servicer should advise borrowers that:

  • They have the right to request a meeting
  • If the meeting has already been requested, the mortgage servicer schedules the meeting, which can be taken care of over the phone within 14 days.

The goal is to mainly assess your financial situation while discussing various options during these and subsequent meetings. The servicer or lender also needs to provide people with a toll-free phone number when they want to find a HUD-certified housing counseling agency.

If the servicer can’t contact the defaulter or borrower, it will record the notice of default and wait for 30 days, after which it (the borrower) will:

  • Send the borrower a first-class letter that highlights a toll-free phone number that’s made available by HUD for people who want to find a HUD-certified housing counseling agency.
  • Try contacting you by telephone up to three times. The lender also has to try at different hours and on days at the provided telephone number. The requirement is also deemed satisfied if all the numbers on file are disconnected. After all, there is no other way for the lender to contact you.
  • The lender will send a certified letter precisely two weeks after they cannot contact you, which provides a way for you to contact them. It will include a toll-free number that allows you to contact a live representative, but it’s restricted to business hours.
  • A prominent link is also posted on the lender’s website with all the information regarding options that people can use to avoid foreclosure, the financial documents they will need, a toll-free number, and the ability to discuss all the alternatives to foreclosure.

The outreach requirements are to the first lien mortgages or the deeds of trust secured by the owner of the occupied residential property with no more than four units for dwelling.

The important thing here is that the lender does not have to contact you or even attempt to contact you and assess your financial situation. It is important to explore other ways of avoiding foreclosure if they have previously notified them in writing to cease all further communication.

California Does Not Permit Dual Tracking

The state law in California bans the use of dual tracking. That means if you’ve submitted an application for a first lien loan modification, there has to be at least a five business days gap after which a foreclosure sale is scheduled. Recording a notice of default or what’s called a notice of sale isn’t enough. The trustee’s sale can’t move ahead until the following conditions are met:

  • A written determination is made that you aren’t eligible, and the appeal period may have expired.
  • If you haven’t accepted the offer within 14 days, or accepted a written first lien loan modification but have defaulted under the first lien loan modification law.

California’s Homeowner Bill of Rights

All homeowners need to be aware of California’s homeowner Bill of Rights, signed by then State Governor Brown in 2018. The bill permanently reinstates previous provisions which were part of the HBOR. There is a lot of information about this online; however, what this bill basically does is, amongst other things, as stated above, give homeowners the ability to sue a lender or a servicer for violations of sections of the bill.

Potential for relief include:

  • Injunctive relief
  • The actual economic damages if the trustee’s deed upon selling the property have been recorded already.

Suppose a court of law finds that the violation was intentional, and reckless which led to wilful misconduct by the servicer or lender. In that case, the court will award the borrower damages or what’s referred to as statutory damages of around $50k.

While the bill does not help avoid foreclosure directly, it makes sure that lenders don’t take advantage of homeowners. Those that do take advantage can then be taken to court.

The Notice of Default

Usually, the nonjudicial foreclosure process will usually start when a lender records their notice of default. That notice is recorded at the county recorder’s office. It includes the nature of the breach and the steps needed to address it.

It is then up to the trustee to mail a copy of the notice within 10 business days of recording to the borrower and anyone else who might have requested the notice. Then within a month, the trustee will mail a copy of the notice to other parties (if needed) like the successor and junior mortgage holders in addition to anyone else.

By default, the notice will give the borrower just three months to clear the default. Clearing the default will help avoid foreclosure.

Notice of Sale

Now, if you’re unable for whatever reason to clear up the default, you will then receive a notice of sale. The notice of sale is sent five days before the end of the three months notice period. The notice often has the time and place of sale, in addition to the property’s address and other information. However, the foreclosure date needs to be 20 days after the three months.

The homeowner will receive the notices of the following nature:  

  • The notice has to be placed within a public space of the city, where the property is expected to be sold. Usually this is done 20 days before the expected date of a foreclosure sale.
  • The notice is published once a every week for 21 days in a row, with the first publication at least twenty days prior to the date of the scheduled sale.
  • The notice is also mailed over to the homeowner or borrower and anyone who has requested the notice in advance or is interested, 20 days before the foreclosure sale date.

How Does The Foreclosure Sale Proceed?

Generally, the foreclosure sale should be held between 9 am and 5 pm, on a business day, i.e., Monday through to Friday. The sale will usually have the lender taking a credit bid. The lender can also bid up to the total amount owed on the property, including any fees and costs involved, or they can choose to bid less. In states where the lender happens to be the highest bidder, but the bids end up being less than what’s owed on the property, the lender can get a deficiency judgment against the said borrower. However, in California, lenders can seek a so-called deficiency judgment.

In California, if the lender ends up being the highest bidder, the property will become what’s referred to as “Real Estate Owned” or REO. However, if the bidder, like for instance, a third party is the highest bidder and they offer more than what’s owed on the home, which means that the sales results in excess proceeds, then the money over and above is used to pay off all the liens on the property. If there is still money left, the ex-homeowner is entitled to it.

Avoiding Foreclosure Los Angeles or Stopping It

A few ways to stop foreclosure include reinstating the loan, filing for bankruptcy, and redeeming the property before it is sold. However, you can also avoid foreclosure if you worked out a loss mitigation option such as loan modification to stop the foreclosure sale.

Reinstating the Loan

California state law mandates that the borrower can reinstate the loan anytime until five business days before the sale in what could be a nonjudicial foreclosure.

Redeeming Property Before Sale

The other way to stop a foreclosure is to redeem the property. That means that you pay the entire loan off prior to the foreclosure sale.

In fact, a couple of states provide foreclosed borrowers with a short redemption period after they have foreclosed the sale; during this time, they have the opportunity to buy back the home. But this isn’t part of California’s state law because there is no statutory right of redemption after a nonjudicial foreclosure. In other words, once your home has been foreclosed, it can’t be redeemed. So, avoiding foreclosure in Los Angeles or any other city for that matter will have to be early on.

Filling for Bankruptcy

Now for anyone facing foreclosure, the best way out of it is to file for bankruptcy. You can also file for bankruptcy even if the foreclosure sale is scheduled for the next day, and it will immediately stop. After you have filed for bankruptcy, you get what’s called an “automatic stay” that will go into effect. The stay is mainly an injunction that will prohibit the lender from selling or foreclosing the property or trying any other tactic to collect the debt temporarily. Yes! The stay isn’t enforced forever.

The Servicemembers, Civil Relief Act offers legal protection mainly for those who have served in the military and need to be protected from the prospect of foreclosure.

Deficiency Judgement Laws In California

In the event of a foreclosure, the total mortgage debt will sometimes exceed what the lender gets from the foreclosure sale price. The difference between the debt and the sale price is what’s referred to as the “deficiency,” a fact we discussed briefly earlier in this article. Some states enable the lender to get a personal judgment against the person to recover their deficiency. Once the lender gets this deficiency judgment, they can collect the amount from the borrower. Fortunately, California isn’t one of those states.

In the event of a nonjudicial foreclosure in California, the deficiency judgment isn’t allowed in California. That’s because most foreclosures in the state are nonjudicial; that’s why most residents in California don’t have to worry about remaining on the hook until the lender recoups the entire amount.

How Long Till You Need To Move Out of A Foreclosed Home in California?

Now, if you refuse to vacate the property following the sale of the home, the new owner can:

  • Offer you cash for keys type deal
  • Take legal action to have you evicted

The eviction notice will start with you getting a three-day notice to leave. If you still have not left home after three days, the new other can go to court to have you legally evicted and then get possession of the property.

Avoiding Foreclosure in San Diego

Courts and agencies in San Diego tend to interpret the law and apply it differently from other cities. Not to mention that all rules and laws tend to be the same across all cities. However, depending on if you’re trying to avoid foreclosure in San Diego or any other city, it is important to consult with an attorney. Most attorneys can help by answering questions and give you an action plan based on your current circumstances.

We would also advise that you speak with a HUD-approved housing counselor to find out the various loss mitigation options available. CFPB can also be used to find a counselor in your area.

Finally, the other way to avoid foreclosure is to sell the home before the foreclosure sale. You can sell the home to a cash home buyer San Diego like us. We buy houses for cash and take on any liability that comes with the property. You get off the hook and can use the money however you want without worrying about what happens after your home is foreclosed.

Avoiding Foreclosure in Los Angeles

Now there are a couple of ways that homeowners can avoid foreclosure in Los Angeles. We strongly advise that you seek out an experienced attorney to help with avoiding foreclosure. However, regardless of whether you are trying to avoid foreclosure in Los Angeles, San Diego, Sacramento, or any other city, the process is about the same.

A Short Sale

Now, if you currently don’t have any equity, it is possible to sell your home for less than what is owed, also referred to as a short sale. A short sale has become increasingly common in the past few years, and many people have become familiar with the concept. Lenders have become organized, and capable of handling several of them, but keep in mind that it is a drawn-out process.

People who have multiple loans also need to remember that they can negotiate with every lender or servicer. At times, a lender may agree with reducing what is owed, but lenders may also choose not to agree. If you can’t resolve this through negotiations, one lender can easily proceed with foreclosure simply because they don’t want to reduce the loan.

Short Sales in Los Angeles can be tricky, and that’s why we strongly advise that you have an experienced short sales specialist on your side. In California, you’ll run into many real estate agents that claim to handle short sales, but in fact, they don’t. The realtors don’t negotiate the short sales but may have someone in the office, mainly hired to handle the negotiations but with little experience. That’s why you always want to ask how they handle short sales personally or have negotiated them personally.

Some Agents in Los Angeles have negotiated several dozen short sales but may also have other people that do it. The difference is mainly in the experience. A specialist does not leave things to the office assistant. They will constantly check with the assistant and make sure there are no hiccups.

Sell to A Cash Buyer

Now when all of the other options have failed, or you have kicked the proverbial can so far down the road that there is no other solution, then that’s where a cash-for-home buyer comes in. Also referred to as a cash buyers, they can help pay off your loan until the point of sale. The closer you tend to get to a sale, the fewer options you have available, and you’ll have to accept a lower cash price.

In Los Angeles, California, as is with other cities in the state, anyone buying a home in foreclosure has to include special language within the contract, which allows the sellers five business days to change their mind. Also, the buyer is unable to give the seller money until those five days have passed. The extra step has mainly been added to protect the selling party from possibly an unscrupulous buyer. However, the five days does not apply in addition to the five days prior to when the sale is scheduled. At some point, you might want to consider selling to an investor, mainly to pay off the lender and seize foreclosure.

Avoiding Foreclosure Sacramento

Many people will find that avoiding foreclosure in Sacramento is easier said than done. However, many of the techniques we’ve discussed above apply to the city of Sacramento. The only difference is that if you decide to sell a home in Sacramento, the chances are that you might get offered more than what you initially purchased it for, and that means you can pay off the loan and still have money left.

When deciding on the best option for you, make sure that you keep your home’s current value in mind, the loan you need to pay off, and how soon you need to pay it off. You also don’t immediately want to file for bankruptcy because it can affect other aspects of your current and future financial health.

If you are unsure how to avoid foreclosure in Sacramento, speak with your lender to figure out all the options. You will also want to get in touch with us. We buy houses Sacramento for cash and can help by making an offer on your property. Plus, we ensure that you can get out from under the pressure of foreclosure quickly.

Avoiding Foreclosure Riverside

Riverside is one of the most vibrant and diverse cities in California. While the price of homes has been rising steadily on average, some people are defaulting on their payments, leading to foreclosure. Fortunately, foreclosures aren’t as widespread as they are in LA, for instance.

Foreclosure is both financially and emotionally stressful. However, unlike in the past, California state law now requires that lenders brief homeowners about all the ways in which they can avoid foreclosure. In fact, lenders are encouraged to help homeowners find the best way to avoid foreclosure, save their homes, and not have the foreclosure haunt them for seven years.

That said, many homeowners may find that they have exhausted all options of avoiding foreclosure except for selling the home. That’s where a cash buyer like us can help.

We will buy any size or type of home across Riverside, even if it is being foreclosed. If you have defaulted on payments, we can still help you. However, it all starts with a member of our team inspecting your property and making an offer. It is up to you from then on to accept our offer and help.

We Buy Houses Riverside and we’ve purchased many homes across Riverside and saved people from having to deal with foreclosure. That’s why we are confident that you can also be dislodged from the grip of what might be imminent foreclosure.

Avoiding Foreclosure San Bernardino

In recent years the city of San Bernardino, California, has seen a spate of foreclosures. One of the reasons identified by experts is job losses, caused by many businesses choosing to move out of the city. Today, for many facing foreclosures in San Bernardino, refinancing their mortgage, renegotiating a lower interest rate, or even a short sale may not work. That’s because the homeowners defaulting on payments have lost their job and can barely make ends meet. However, since the prices of homes in many parts of the city have been going up on average, there is a chance to sell the home for a higher price than what is owed to the bank or servicer, pay off the loan, and still have some money left.

While it might be a longshot for some homeowners, it is worth considering since it is a better option than being foreclosed. However, you can only sell a home if it is in good condition. Most people who buy homes will want one that has the roofing, kitchen, bathroom, and basement in good condition at the very least. Also, the more money you demand, the better condition the home will need to be in. That said, if you had the money, you’d understandably be paying the lender to avoid foreclosure instead of looking for an alternative. That’s why many homes on the brink of foreclosure don’t appear attractive to regular buyers in the market for a family home. It would help if you also considered the costs involved with selling, like paying a realtor’s commission, staging, and renovation, so that the home is up to market condition.

The other albeit better alternative is to sell the home to an investor. Cash for home buyers are investors who will buy a foreclosed home, pay off all the debt, invest in repairs, update the home and then sell it for a profit. Most cash home buyers like us aren’t deterred by homes that are on the brink of foreclosure and are here to make an all-cash offer based on the condition and location of your home.

The benefit of selling to a cash home buyer in San Bernardino is that you don’t have to worry about spending the money on repairs and updating the home. You get cash, pay off the remainder of your loan and perhaps walk away with some extra money in your pocket. We Buy Houses San Bernardino Most transactions will take up to ten business days, which is far sooner and faster than a short sale if you decide to go down that road.

We Buy Houses About To Be Foreclosed

We can tell you from experience that buying foreclosed property or one that’s on the brink of foreclosure is tricky and highly risky. Things might not always go as planned, even for experts like us who have been involved with these types of transactions for years. The other thing that’s worth considering when we make an offer is that it is based on the home’s current condition, factoring in the amount of money we might have to spend to get the home up to market condition.

Many homeowners sell their homes to us because there is the prospect of getting money fast, faster than any other method of selling the home. Even selling your home by putting it on the market can take potentially months; that is, if you’re able to find a buyer because your home is in the best condition it can be.

As cash for home buyers, our goal is to take the stress and uncertainty out of trying to sell a home for those on the brink of foreclosure. We have a team that quickly moves through all the steps, saving you from a lot of the work that’s involved in the process. Plus, we take care of much of the expenses involved with selling the home, which would otherwise have to be borne by the homeowner.

Selling to us also means that you can continue to have good enough credit, which can later be improved. Foreclosure, as mentioned above, sits on your credit statement for up to 7 years, and even after that, you will be asked if there was ever a home you owned that was foreclosed when applying for a loan. In a way, it is a stain that sticks with you for years, if not potentially forever. That’s why many homeowners choose to sell their homes to cash for home buying companies like ours.

If your home is on the brink of foreclosure, don’t wait any longer. Contact us right away, and we’ll make you an offer, all things considered. If you decide to take our offer, we will close the sale in a couple of days, ensuring that you get the cash we offered in your hands! Once you do, we strongly advise that you clear up all loans apart from the mortgage if you have money left. That should help improve your credit greatly.

Call us today to get an offer on your home.

Why Even Bother Stopping Foreclosure?

We often get this question, and it is honestly a fair one mainly because of the effort involved. However, many people fail to see that a foreclosure can and often does have many long-term consequences financially and emotionally. For starters, the foreclosure will stick to your credit report for several years! Also, even after those seven years have passed, when applying for a loan, every application will ask, “if you’ve ever had a foreclosure?”

While you might not be able to afford to stay in the home today, that does not mean that you want to bear the brunt of the financial impact it can possibly have on you trying to own property again. That’s why having a plan is so important. You shouldn’t let the looming threat of foreclosure hinder future financial plans.

Foreclosures California

The housing crisis has struck California hard, with many homeowners now facing foreclosure. If you’re in this situation, it’s important to know your rights and options.

A pre-foreclosure is when a homeowner hasn’t made a mortgage payment in 90 days or more. The lender will then send a notice of default, which gives the homeowner a certain amount of time to catch up on payments. If the homeowner doesn’t do this, the property will then be sold at a foreclosure sale.

Foreclosure Moratorium California

The foreclosure moratorium has been a lifesaver for many homeowners who have been struggling to keep up with their mortgage payments. The moratorium has allowed them to stay in their homes and avoid foreclosure. However, the moratorium is set to expire at the end of this year, and many homeowners are still struggling to make ends meet. If you are one of these homeowners, it’s important to understand your options and know what you can do to avoid foreclosure.

There are several government programs that can help you keep your home if you’re struggling to make your mortgage payments. The Making Home Affordable program is one option that can offer you relief. This program offers many different ways to help you lower your monthly payments and make it more affordable to keep your home.

You may also be able to modify your loan to make it more affordable. Loan modification can be a good option if you’re struggling to make your payments but still want to stay in your home. It’s important to speak with your lender about this option and see if it’s right for you.

If you’re facing foreclosure, it’s important to remember that you have options. There are programs and assistance available that can help you keep your home. Speak with your lender and explore all of your options so that you can make the best decision for your situation.

Pre-foreclosure Houses

Pre-foreclosure homes are usually sold as is, which means that any existing damage or problems with the property will not be repaired by the seller. Secondly, because the homeowners are in financial distress, they may be more willing to sell the property for less than its market value.

Pre-foreclosure vs Short Sale

There are a few key differences between pre-foreclosure and short-sale homes. Firstly, in a pre-foreclosure situation, the homeowners have not yet reached an agreement with their lender to sell the property for less than what is owed on the mortgage. This means that the home is still technically owned by the homeowners, and they still have a chance to avoid foreclosure by catching up on their payments.

Short sale homes, on the other hand, are already in the process of being sold by the homeowners to a third party for less than what is owed on the mortgage. The lender has already agreed to this arrangement, and the home is no longer owned by the homeowners. This means that the foreclosure process has already begun, and the homeowners will not be able to keep the home.

Another key difference is that pre-foreclosure homes are usually still in good condition since the homeowners have not yet moved out. Short sale homes, on the other hand, maybe in poor condition since the homeowners have already moved out and may have left the property in disrepair.

Lastly, pre-foreclosure homes are typically listed at a higher price than short-sale homes, since the homeowners still have some equity in the property. Short sale homes are typically listed at a much lower price since the homeowners do not have any equity and are simply trying to get rid of the property as quickly as possible.

FAQs About Foreclosure

Q1. Are Foreclosed Homes Worth Less?

A . Yes! The vast majority of foreclosures are often sold at a sizable discount, below their otherwise market value. The exact amount will depend on the size, age, condition, and location of your home. Furthermore, many foreclosed homes are fixer-uppers, which means that additional money needs to be poured into the property, another reason why it is cheaper.

Q2. What is a Sheriff’s Sale Auction?

A. Yes, we agree that the term sounds like something out of a western. However, a sheriff’s sale auction occurs after a lender notifies the borrower that they have defaulted, provided a grace period to the borrower to pay all that’s due. The auction is mainly meant to help the lender get a return on their investment quickly. Most of these auctions will occur at the city’s courthouse steps. The reason why the term “sheriff” is used is that it is managed by local law enforcement. The property is sold to the highest bidder at the date and time that’s made public. Notices for public auctions like these can be found in the local newspaper and online. Googling Sheriff sale auctions in California should help you find quite a few of them.

Q3. What Are REO Properties

A . Generally, these are properties that didn’t sell at auction and hence had to be reverted to the bank. These are called Real Estate Owned (REO). A business’s REO department often manages the properties. You can find an existing list of these properties online, and these listings can be searched by zip code, state, and city.