Search CA Foreclosure Knowledge-base:

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.

Friday
Apr302010

California Mortgage Foreclosure Laws – Postponement of Trustees Sale

The postponement of the Trustees Sale is not an official foreclosure step under California foreclosure process, but perhaps it should be because most auctions are postponed several times before taking place.

The California mortgage foreclosure laws (Civil Code section 2924g) allow the lender’s trustee to postpone the foreclosure auction for up to one year without having to restart the California non-judicial foreclosure process.

Reasons for Postponement

Under The California mortgage foreclosure laws, there could be several reasons for the postponement:

1.  Lender/Borrower Agreement - This is the most common postponement reason under the California Mortgage foreclosure laws. For example, a loan modification or forbearance agreement negotiation will often result in a postponement.  Homeowners should also be aware that in the case of forbearance agreements, missed payments could automatically restart the foreclosure process without any further notifications being made by the lender.

2. Bankruptcy Filing - If a homeowner files for bankruptcy protection, California mortgage foreclosure laws require that the courts put an automatic stay on all debt collection actions -- this includes foreclosure. While this may seem like a good solution, bankruptcy merely delays the foreclosure. In most cases, the lender will file a request to the court for an order for relief from the stay. The bottom line is that the property is collateral for the debt, and the lender has the right to take the collateral if the homeowner lacks the ability to pay the debt as agreed.

3. Lender’s Beneficiary's Request – California mortgage foreclosure laws allow the lender’s beneficiary to request (decide) to postpone the sale. They might do this for any reason.  For example, they might not be prepared to take the property or believe the property is about to be sold in a private sale.

4. Trustee's Discretion - The lender’s trustee may postpone the sale under the California Mortgage foreclosure laws. One common reason is that they are unable to reach the lender for instructions.

5. Court Order - Although somewhat rare, a court order may be used to postpone the sale, this is especially true when a lawsuit is filed with regards to some allegation affecting the title or the loan.

Friday
Apr302010

California Mortgage Foreclosure Laws – Trustees Sale (Auction)

Once the Notice of Trustees Sale has been filed (under Civil Code 2924f), the next step in the mortgage foreclosure process is the Trustees Sale (or auction).

The California mortgage foreclosure laws allows an auction to occur in as little as 21 days after the recording of the Notice of Trustee Sale. 

Under the California mortgage foreclosure laws, the property is sold at an auction in a public location to the highest bidder. 

Under the California mortgage foreclosure laws, the trustee establishes the opening bid amount, as directed by the investor on the loan. This opening bid amount is usually based on the amount of debt and any associated legal fees. However, with the rapidly falling real estate prices, the trustee may choose to establish a lower opening bid in order to sell the property to a third party buyer, avoiding the need for the foreclosing lender to take the property in foreclosure.

Due to the current financial climate, approximately 75% of all Trustees Sales Auctions result in the property being taken back by the foreclosing lender.

 

Friday
Apr302010

California Mortgage Foreclosure Laws – Notice of Trustees Sale

Under the California mortgage foreclosure laws [Civil Code 2924 c.(b)(1)], 90 days after the filing of the Notice of Default, the next step in the mortgage foreclosure process is the Notice of Trustees Sale.

The California mortgage foreclosure laws require that the lender’s trustee (i.e., the attorney who is performing the foreclosure) performs some ministerial procedures.  This will usually take approximately one week to complete.

The next step in the California mortgage foreclosure laws process is the Notice of Trustees Sale must be recorded with the County Recorder.  This Notice of Trustees Sale indicates the date and location of the auction. The California mortgage foreclosure laws also require that a copy of the “Notice of Trustees Sale" is published in a newspaper with a general circulation.

The California mortgage foreclosure laws require that a copy of the Notice of Trustee Sale is served to the property owner who is subject to foreclosure, and a copy is also posted onto the property, usually on the front door or front gate. 

Under the California mortgage foreclosure laws, the property owner has until 5 days before the auction to bring the loan current, although in reality, most lenders are willing to work with the property owner up until the day of the auction.

Under the California mortgage foreclosure laws, the next step in  the process is the actual Trustees Sale.

To stop foreclosure or prevent the foreclosure process entirely, it is advisable that the property owner work with a foreclosure avoidance team to prevent the foreclosure auction from occurring.  One important point worth mentioning here is that most lenders do not want to foreclose.  They want to avoid the legal expense and avoid the liability that comes with owning vacant real estate.  For these reasons, most lenders will consider any reasonable proposal to avoid foreclosure and may be willing to postpone the auction.

Friday
Apr302010

California Mortgage Foreclosure Laws – Notice of Default

Before a Notice of Default can be filed, the California mortgage foreclosure laws require that lenders comply with Civil Code section 2923.5.  This California mortgage foreclosure law requires the lender to make efforts to contact the borrower to identify alternatives to foreclosure, 30 days prior to filing the Notice of Default. 

Notice of Default Process

The California mortgage foreclosure laws also provides for the Notice of Default process in Civil Code section 2924. 

This California mortgage foreclosure law specifies that the Notice of Default is recorded “in the office of the recorder of each county wherein the mortgaged or trust property or some part or parcel thereof is situated”.  The Notice of Default is also published in a newspaper of general circulation within the county.

Additionally, the California mortgage foreclosure laws require that a copy of the Notice of Default is mailed or delivered to the property owner.

The language in the Notice of Default document itself is also specified in the California mortgage foreclosure laws.  While this document appears to be very carefully worded, it has created confusion for the many property owners who have received one, because this document indicates that the property may be sold at an auction.  As a result, many property owners mistakenly believe that this document is a Notice of Trustees Sale.  However, the Notice of Trustees Sale will include the scheduled auction date – the Notice of Default does not include an auction date.

Notice of Default and Loan Modification

Often homeowners receive a Notice of Default while they are actively pursuing a loan modification with their lender.  This often creates fear and panic because many homeowners seeking loan modifications were lead to believe that the negotiations were proceeding well.  This event may also create possible legal issues because, clearly, the lender is moving forward with the foreclosure process before completing its evaluation of foreclosure alternatives – the legal issue arises because Civil Code section 2923.5 requires this evaluation 30 days before sending out a Notice of Default. 

Attorneys

Unfortunately,  loan modification approval rates are hovering well below 10 percent. It is becoming increasingly clear that the attorney-lead loan modification programs are failing horribly!  Borrowers’ backs are against the wall and many are filing lawsuits in an effort to avoid foreclosure. The only real winners are the attorneys. 

The problem is that most attorneys are using legal tactics in an effort to resolve financial issues. There is a major disconnect here!  Attorneys often perform their legal maneuvering without truly understanding the borrowers’ (complex) financial issues and the lenders’ financial pressure points. 

Property owners need an alternative to the typical attorney-based negotiations. Fortunately, a much better alternative does exist.

The borrowers’ financial issues and the lenders’ financial pressure points must be understood and then used in the negotiations with the lenders to find the middle ground. While the attorney-based approach may be useful for creating delays in the process, unless some financial creativity is injected into the process, you cannot expect your attorney to force the lender’s attorney to agree to something simply because you want them to.

You Need a Foreclosure Avoidance Team

Instead, property owners should work with a foreclosure avoidance team that understands the lenders’ financial pressure points and knows how to use them to your advantage.  The process must also include a thorough financial evaluation to identify all the important issues.  This leads to an evaluation of possible opportunities to resolve the matter in a way that is beneficial for you, the borrower, while convincing the lender that they are absorbing the minimum cost compared to what they would face should they not approve the request. By approaching the matter in a way that makes sense for the lender (minimizing their losses), you can get them to say “YES” to your proposal!

Attorneys are an important part of the team, as they have the expertise to resolve legal issues that may arise. After performing a thorough evaluation, an attorney may be needed to implement parts of the strategy. For example, a forensic loan audit might be recommended based on your circumstances, and it might identify contractual defects in the loan document that violate State or federal laws. This is an important pressure point that should be included in any negotiation. Or, other legal issues might be identified that require the use of “big guns”. 

In summary, think of your foreclosure avoidance team as a toolbox.  You need to have the appropriate set of tools (experts) to do the job right.  Most distressed borrowers need experts in finance, income taxes, real estate sales, appraisal, legal, etc. At this important juncture, it is absolutely critical that you have a team of experts to help you be sure that you get the most favorable outcome possible, not just an attorney.

Friday
Apr302010

California Mortgage Foreclosure Laws – Pre-Notice of Default

Under the California mortgage foreclosure laws [Civil Code Section 2923.5], before lenders may begin the mortgage foreclosure process, they are required to attempt to contact the borrowers 3 times to determine if any alternatives to foreclosure exist.  This process must be completed 30 days prior to the filing of a "Notice of Default", effectively slowing-down the process. This change to the California mortgage foreclosure laws was enacted in July 2008 in an attempt to stabilize the housing market and help homeowners avoid foreclosure.

By requiring lenders to work with the borrowers, the California mortgage foreclosure laws better encourage alternatives to foreclosure, such as loan modification, deed-in-lieu, or forbearance agreements. Of course, Civil Code Section 2923.5 cannot force mortgage lenders to enter into agreements with the borrowers.  As a result, this California mortgage foreclosure law is merely delaying their ultimate resolution. 

Lenders Don't Want Options That Lose $$$

Unfortunately, in most cases lenders have been unwilling to agree to the financial losses that many distressed homeowners were seeking if they had entered into loan modification agreements.  It’s just business for the lenders, and delaying the inevitable financial losses has helped prop-up their balance sheets in the short term.

To complicate matters, many borrowers are frustrated with the lenders’ reluctance to approve their loan modification requests and are responding to the pending foreclosures with lawsuits.  One of the primary legal arguments is that the lenders’ representatives do not “swear under penalty of perjury” that the process specified in Civil Code Section 2923.5 was followed correctly. Because there have been a very large number of these lawsuits, the banks are asking the appellate court to address this issue in an effort to eliminate these lawsuits altogether. 

Legal Tactics Aren't Working

Regrettably, the attorneys are steering the homeowners toward legal tactics at the expense of finding middle-ground based on thorough financial assessments, planning, and negotiations.  I say "regrettable" because lawsuits are expensive and don't address the core financial issues. It would be better to undergo a fundamental financial assessment and analysis to better understand the lenders’ perspective and pressure points.

Attorney Aren't Financial Experts

Despite their best intentions, lawyers often lack the fiscal background and understanding of the financial pressure points that lenders face and how to use them for the advantage of the property owner.  This renders them largely ineffective in negotiating the debt reductions that homeowners need. With loan modification approval rates hovering well below 10 percent, property owners need to find alternatives to the typical attorney based negotiations. While each homeowner’s situation is unique, it all boils down to this issue.

What the homeowner can afford vs. how much the lenders should reduce and still make sense from a business perspective. 

 

While the issue can be easily stated, in reality, coming to the correct dollar amount is not simple!. The financial assessment and validation process requires a set of skills that is far different than what most attorneys are able to provide.

Page 1 ... 3 4 5 6 7 ... 10 Next 5 Entries »