Foreclosure could result in you:
Owing the mortgage company the deficiency balance of the mortgage (the deficiency balance is the total remaining balance after the sale price of the home),
Becoming ineligible for a government mortgage for at least 7 years,
Owing a large amount of taxes to the IRS, additionally,
Having to deal with the stress and embarrassment of it all.
There are things that you can do to prevent your lender from initiating a foreclosure against you. Know your rights and protect your options!
What should I expect if I’m facing foreclosure and what can I do about it?
A foreclosure is the legal process where your mortgage company obtains ownership of your home (i.e., repossess the property). A foreclosure occurs when the homeowner has failed to make payments and has defaulted or violated the terms of their mortgage loan.
A foreclosure can usually be avoided—even if you already received a foreclosure notice. However, you must take action as soon as you can.
There are two main types of foreclosure: Judicial foreclosure, and non-judicial foreclosure. California is a non-judicial foreclosure state where a foreclosure sale usually occurs as a private sale, not preceded by any judicial action, and is also known as a “trustee sale.” A trustee sale bypasses the courts altogether, which means the matter is handled with significantly less time and expense than judicial foreclosure. Trustee fees are often less than attorney fees, and the entire process can often be completed within about 4 months after the notice of default is issued.
Three months after the date on which the Notice of Default was recorded a trustee may then give notice of sale. The sale notice must be served at least 20 days before the date set for sale of the property. Thus, a trustee sale requires a total of 3 months (after the notice of default) plus 20 days (after the notice of sale). The foreclosure sale is to occur at a date, time, and place set by the trustee and as described in the Notice of Trustee Sale. The sale will be “cried” by the trustee or an authorized agent of the trustee. The term “trustee” appears on many mortgage loan and foreclosure documents, including the trustee’s deed issued to the successful bidder/buyer (either a third party bidder or the lender).
The most important thing – take action now. You have nothing to lose and everything to gain.