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Real Estate: Mortgage & Foreclosure

ANAND LAW PC > Real Estate: Mortgage & Foreclosure

JUDICIAL VS. NON-JUDICIAL FORECLOSURE IN CALIFORNIA

[vc_row triangle_shape="no"][vc_column][vc_column_text]In California, there are both “Judicial Foreclosures” and “Non-judicial Foreclosures”.  A judicial Foreclosure offers some advantages to lenders, but it requires them to file a lawsuit in court and obtain court approval before selling your home.  In contrast, a Non-Judicial Foreclosure allows a lender to sell the home without ever going to court.  The process is completed entirely without the supervision of any Court or any other government agency. In California, the lender can choose to do either a Judicial or non-Judicial foreclosure.  The borrower has no say in what type of foreclosure the lender chooses.   Because non-judicial foreclosure allows...

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THE FORECLOSURE PROCESS IN CALIFORNIA

[vc_row triangle_shape="no"][vc_column][vc_column_text]In California, a lender can choose to do either a Judicial or non-Judicial foreclosure.  Since a non-judicial foreclosure allows the lender to sell your property without any government oversight, almost all foreclosures in California are Non-Judicial.[/vc_column_text][vc_empty_space][vc_column_text] NOTICE OF DEFAULT [/vc_column_text][vc_empty_space][vc_column_text]The Non-Judicial Foreclosure Process Starts with the filing of a Notice of Default, also called an NOD. This document is “recorded” with the County where the property is located.  It is recorded by the “Foreclosure Trustee” who works for the lender.  The document states that you are in default under the terms of your loan agreement, and that the lender is going...

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REDUCING PRINCIPAL BALANCE & REMOVING MORTGAGES (FIRST AND JUNIOR) IN BANKRUPTCY

[vc_row triangle_shape="no"][vc_column][vc_column_text] CRAM DOWNS & LIEN STRIPPING (REMOVAL) [/vc_column_text][vc_empty_space][vc_column_text]‘Cramming down’ refers to reducing the amount of the lien to the market value — in other words, if a mortgage balance is greater than the market value of a property, the balance can be reduced down to the market value amount.  Cramming down of liens can be done through Chapter 11 on properties that are not a primary residence.  Liens that may be crammed down include mortgage, HELOC (home equity line of credit), HOA (Homeowners’ Association), and judgment. In a Chapter 11 bankruptcy, you can also remove fully unsecured liens from your rental properties (i.e....

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FACING FORECLOSURE? WHAT CAN A LENDER DO AFTER DEFAULT?

[vc_row triangle_shape="no"][vc_column][vc_column_text]In the event that a trustor (or borrower) defaults on the payments owed under the note, a beneficiary (or creditor) holding a deed of trust generally has three legal options to enforce his rights. The beneficiary can: (i) sue to enforce the note obligation by bringing an action to collect on the debt; (ii) seek judicial foreclosure of the property securing the debt; or (iii) have the trustee exercise its power of sale, if such power is expressly granted in the deed of trust. The timeframe in which a beneficiary can exercise these options (the “statute of limitations”) differs.[/vc_column_text][vc_empty_space][vc_column_text] SUIT...

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FACING FORECLOSURE? WHAT DOES THE BANK HAVE TO DO BEFORE THEY CAN SELL MY HOME?

[vc_row triangle_shape="no"][vc_column][vc_column_text] HOMEOWNER BILL OF RIGHTS [/vc_column_text][vc_empty_space][vc_column_text]As part of the California Homeowner Bill of Rights (a series of laws which took effect in January 2013 in response to the foreclosure crisis affecting the state), prior to filing a notice of default to commence a nonjudicial sale, the law (California Civil Code Section 2923) now requires that a mortgage servicer, beneficiary, or trustee contact the trustor/borrower in person or by phone in order to assess the borrower’s financial situation and discuss options available to the trustor/borrower that may avoid foreclosure. Cal. Civ. Code § 2923.5(a)(2). After this initial contact is made, the mortgage...

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DOES THE BANK HAVE TO ACCEPT MONEY I OFFER THEM TO CURE THE DEFAULT (REINSTATE THE LOAN)?

[vc_row triangle_shape="no"][vc_column][vc_column_text] STATUTORY RIGHT TO REINSTATE LOAN BY PAYING DEFAULT [/vc_column_text][vc_empty_space][vc_column_text]A lender/bank cannot refuse to accept your payment for the full amount of default at any point prior to 5 business days before the sale.  Up until then, per California Civil Code Section 2924, you have a statutory right to “reinstate” the loan by paying the default amount (plus other fees, such as interest, penalties, and costs), and they are required to file a Notice of Rescission of the Notice of Default.  Cal. Civ. Code § 2924c(a)(1) The lender (or its servicer) is also required to provide the borrower with a “beneficiary statement,” which contains...

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