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Foreclosure: The Stop California Home Loss Blog

Are you at risk for foreclosure in the state of California? Proper-t-Solutions' presents Foreclosure: The Stop California Home Loss Blog. This blog is the homeowner's guide to determining your options when at risk for foreclosure. Read our articles, leave your comments and let's beat foreclosure and stop California home loss.


How can a Loan Modification Attorney assist you?

Why people hire loan modification attorneys in california

In California, many people wanting to keep their house hire a loan modification attorney.  A loan modification attorney in California will often promise to:

  1. Review your case and offer their legal perspective.
  2. Use the correct documents and correct negotiating techniques based on their expertise in the law.
  3. Stop the foreclosure proceedings.
  4. Obtain faster and better results because loan modification attorneys are better at negotiating with lenders.
  5. Buy you more free time in the property.

They will even tell you that if you don’t use a loan modification attorney in California, you will not get favorable results, and that you may lose your home.  Regrettably, these attorneys are “over-selling” the benefits they can provide with no proof! 

Why hiring loan modification attorney may not be in your interests

Have you noticed that when you ask a loan modification attorney a simple question, you can often get a very complicated response that does not really answer your question?

What they don’t tell you is that loan modification attorneys' success rate is very very low.  Based on their past performance, you will very likely lose your home and completely destroy your credit rating in the process.  You must avoid these problems with loan modification attorneys:

  • Loan modification attorneys in California are only able to get lender approval less than 10 percent of the time.
  • The lender’s loan modification offers often re-amortize the late fees and legal costs back into the loan and extend the loan term to 40 years or more.  Quite often, the borrower’s costs actually increase.
  • According to the Fitch Rating Agency (they rate the banks’ performance), it was estimated that 65 to 75 of homeowners (conservatively) would “re-default” on their loans within 12 months of receiving loan modification approval.

The truth is this:

  • In reviewing loan modification requests, lenders are making a financial decision, not a legal decision.  The legal stuff follows after the financial decision is made!
  • You cannot force a lender to approve a loan modification by hiring a loan modification attorney.
  • The lender has better attorneys than you.

California mortgages foreclosure - Private Trustee Sale or Judicial Proceeding? 

Foreclosure in California - the Lender's options

In California the mortgage foreclosure process can take place in one of two ways. Most of the time, the lender will foreclose at a private trustee's sale, which is authorized under the deed of trust.  However, in a very small percentage of cases, the lender will bring a lawsuit for a judicial foreclosure.

As a foreclosure process, a private trustee sale is much faster than a judicial foreclosure, taking as little as four months to complete.  However, a judicial foreclosure takes as long as any other lawsuit on the regular civil calendar, usually one year or longer. 

A civil litigation (judicial foreclosure process) has higher costs, including attorney's fees, procedural complications, and the possibility of defending against a desperate or aggrieved borrower.  As a result, a private sale is more often pursued by the lender as the foreclosure option because it is typically quicker and less expensive to conduct.  However, in high valued properties, judicial foreclosure may be more appropriate because it may allow the lender to pursue collection of the remaining deficiency debt after judicial foreclosure.

Foreclosure in California - right of redemption

Judicial foreclosures are also different because they provide the borrower with the right of redemption after the foreclosure sale is completed:

  • In California, the period of redemption is either 3 months or 12 months after foreclosure. 
  • If the sale raises enough money to repay the secured debt, the redemption period is 3 months after foreclosure. 
  • If it doesn't, the period is 12 months after foreclosure.

In order to redeem the house, the you must pay the "redemption price." This is generally the price paid by the purchaser at auction plus any taxes or assessments that are due, along with costs and interest.

This right of redemption does not exist in California for non-judicial or private foreclosure sales.

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