What Is the Foreclosure Process in California?
Foreclosure can be a terrifying process. Luckily, it isn’t easy for a bank to foreclose on a home. The process of foreclosure is lengthy, and there is a lot you can do about it even after the wheels have been put into motion. Here’s a breakdown of the foreclosure process and what you need to do.
When Does the Bank Initiate Foreclosure?
Thirty days after you’ve missed a payment, you’ll usually get a notice. You usually have about 2 or 3 months to pay this amount until your property goes into foreclosure. If you’re late but haven’t been notified of foreclosure, you should contact your bank immediately. You can make payment arrangements with them. For the most part, banks don’t want to foreclose on properties. It’s expensive for them as well as you. They may be able to cut you a break by giving you more time to pay. Still, you may need to resolve the situation ultimately by selling the property.
What Happens After Foreclosure Has Started?
After foreclosure has begun, you can still pay off what you owe to stop the foreclosure. Of course, that can be a big ask, especially if you’re significantly late. And you’ll have to pay the additional fines, penalties, and legal fees.
There are other things you can do. If you declare bankruptcy, it’ll halt the foreclosure. But only temporarily. Once the bankruptcy proceedings have been completed, you’ll need to have figured out a solution, whether it’s reducing your other costs or selling your property.
Selling your property is another solution. You can sell your property up until the foreclosure auction. If you can do that, you forgo the auction entirely and are able to save a lot of money on legal fees and other charges.
What If the Foreclosure Occurs?
A typical foreclosure will take around four months from beginning to end. While that may seem very fast, there are steps you can take to react to the foreclosure. The best thing you can do is try to sell your property as soon as you can. This will give you money from the proceeds of the sale without incurring foreclosure expenses.
If it comes to the worst and your property is sold, then you’ll get any profits less the amount you owe the bank. Usually in a foreclosure, the sales proceeds are eaten up by legal fees. That’s why most people want to sell their homes before the foreclosure ever occurs. But if you owe $10,000 on a $200,000 home, the foreclosure isn’t going to take the full amount; it’s just going to take the $10,000 and legal fees.
But the cost isn’t the only issue when it comes to foreclosure. Having a foreclosure on your file will damage your credit score as well as make it harder to purchase a home in the future. Most people are better served by avoiding foreclosure at all costs, and the easiest way to do this is by selling a home quickly.
Do You Have a Property Going Into Foreclosure?
If you have a property headed to foreclosure, the first thing you should do is get an estimate on how much you could get for it. That way you can make an educated decision on what your next steps should be. If your property is underwater (if you owe more than it’s worth), you might need to get approved for a short sale. A short sale lets you sell the home for less than you owe, and the amount that you would have owed is written off. Selling your home quickly will subvert the foreclosure and let you walk away without a foreclosure on your credit.
But the first step should be to talk to your bank. They may be able to give you a little leeway so you can connect with a buyer and sell your home as quickly as possible.
Do you have a home going into foreclosure? It’s best to act now. Contact Frank Buys Houses today to get a quote.