We are living in difficult times, it is a fact. Another fact is that it is traumatic to lose your home. You can lose your home if you cannot keep up with mortgage payments. This could happen due to various reasons, such as job loss, illness or incapacity, death, loss of second income because of a divorce and many others.
Once you find yourself in a position that you can’t keep up with making the required payments, it is best advised to contact the lender. Don’t wait until foreclosure notices are sent out. Be the first to act in this unfortunate situation. This way, the lender and the homeowner might be able to work out terms to allow the homeowner to catch up. You may even try to arrange to make repayments over a longer term. You can also motivate that if you have fallen behind, that you increase your repayment installment amount over a certain period, until you have caught up. Find out if you qualify for a government loan, which you can use to pay the arrears.
If your efforts fail, then it is best you get to know about the laws regarding foreclosure in your state.
The laws regarding mortgage foreclosure vary over state lines. In California, the foreclosure process takes approximately 120 days, or four months. This would be under normal instances, where all notices were sent out and that there were no contesting from the homeowner. However, there are foreclosure laws that assist homeowners facing foreclosure to save their homes. These are known as right of redemption laws.
The right of redemption comes into effect where the home has been foreclosed on and the homeowner is given a certain time period to buy it back. It is a statutory right of redemption and is supported by law. This right of redemption allows homeowners the chance to reclaim their property, even if has already been sold at an auction.
California has judicial and non-judicial foreclosures. The judicial foreclosures are handled through the court system, and that is where the “judicial” comes from. The lender files a complaint against the homeowner who has missed payments, laying out all details about the debt. Both the lender and the homeowner have to appear in court to settle the case. Depending on the outcome judgement might be for the total amount outstanding on the loan, as well as the costs of the foreclosure process and all legal fees. These cases however, are rare and expensive, it is also a very long process, and that is why lenders would rather follow the non-judicial route in California.
Making use of non-judicial foreclosures takes place without involving the courts. If a homeowner falls behind with payments, a notice of default is sent out by the lender. This is a notice to the homeowner that the loan repayments are behind and that legal action might follow.
During this time, the homeowner have the opportunity to make arrangements with the lender. These arrangements can include trying to change the repayment terms of the loan. The homeowner have the right to put their house up for sale, to cover amounts outstanding.
Once the homeowner received the notice of disclosure, under Californian laws, they have 90 days in which to bring the loan up to date. If the homeowner can’t bring the arrears up to date, a notice of sale will be delivered and this is recorded at the County Records Office and would be published under the legal sections in local newspapers. The home would then be put on public auction.