HOW TO SAVE YOUR HOME FROM FORECLOSURE
REAL ESTATE LAW - HAS YOUR HOME BECOME UNAFFORDABLE?
Real estate law... foreclosure... short sale... do you know all the ins and outs? Would you like a professional, skilled in real estate laws to guide you through the real estate law minefield?
Do you have an adjustable rate loan? Has your payment adjusted and you can’t afford the new payment? Has your financial situation changed?
In this turbulent real estate market there are a lot of people in the same position. Is there any hope of keeping your home? The answer is not a clear yes or no. The answer can be maybe.
Perhaps you can work with the lender to get a loan modification. Most lenders require you to go through a “trial period”, which is a period regulated by the government to prove that you can make your payments on time. The trial period is required before the lender will consider a loan modification. The requirements can vary depending on the type of loan, and the lenders. Loan modification is a difficult process; however, I do advise my clients to attempt this course of action.
A “short sale” is another alternative. This means you would sell your home for less than you owe IF the lender will agree. The affect of a short sale is less damaging to your credit rating. The lender releases you of any liability for the loan and generally there are no tax consequences or deficiency judgment issues.
Read more information on short sales
If none of these alternatives are possible, you may face a foreclosure. The procedure for a foreclosure is as follows:
A Notice of Default is recorded after you have missed 1 or more payments. Most lenders are following government guidelines and not filing notice of default for at least 6 months. Lenders are required by government regulations to offer “options to foreclosure”, including credit counseling, trial payment periods and loan modification. You have 90 days in which you can bring your loan current or work out one of the options mentioned above. If you are unable to bring your loan current or establish a “work out” plan the home will be scheduled for sale.
Notice of Trustee Sale is then recorded, published, and mailed to the owner and is also posted on the property. At this point you have approximately 14 days in which to repay the loan in full or work out a plan. The property is then sold to a party who bid at the sale of the property, if no one bids on the property it reverts to the lender and becomes an REO (real estate owned).
Are there any other options? Yes! Recently, some borrowers have had success in suing their lenders. These suits have resulted in a variety of remedies - the lender has agreed to a reasonable loan modification, a portion of the principal has been forgiven, and in the extreme the note has been rescinded wiping out the note and reconvening the deed of trust meaning the owners own the home free and clear.To explore your options, a brief consultation with an attorney is worth your time to see if there is a solution for you to keep your home.
If you want more information or wish to consult with an attorney conversant with real estate laws, contact me, Rita M. Lingwood, Attorney at Law, (916) 202-3552 to set up an appointment. Alternatively, complete the form to the left and get started now before it's too late! Real estate laws are complex - don't risk your biggest asset by playing real estate law roulette!