Can You Sell A House In Foreclosure CA?
Yes, you’re able to sell a house that’s currently in foreclosure in CA. However, the process for doing so is lengthy and can be complicated if you are unsure of what to expect. A single mistake could result in you being unable to sell your home before it’s foreclosed on. To begin with, you must obtain a signed offer before your home is auctioned off. Once you do so, you’ll no longer be saddled with mortgage payments and the hassle of dealing with foreclosure. Start this process by requesting a cash offer today!
Selling A House During Foreclosure In California
If you’ve been notified that your home is going to be foreclosed on, you’re likely feeling stressed out at the prospect. Many people who face the same issues go through financial hardships resulting from high medical bills, a sudden job loss, or divorce. While it might appear as though you cannot do much in this scenario, you can still sell your house in CA.
While selling your house during a foreclosure can be done, your lender will still need to be notified. In CA, lenders are unable to complete the foreclosure process if the homeowner has been given a verified offer. However, the amount of time you have to sell your home is finite, which means that you should do so without delay. In this guide, you’ll learn about your rights as a homeowner regarding foreclosure.
What Is Foreclosure?
The foreclosure process occurs when a borrower or homeowner doesn’t make their mortgage payments on time. If a house is foreclosed on, it’s standard for the lender to take possession of it and attempt to sell it. This sale usually occurs via an auction, also known as a sheriff’s sale. The auction process is the same regardless of which county you live in.
When you took out a mortgage loan, this loan was secured by the piece of real estate you bought. Since your home is being used as collateral, your lender can legally seize it if you don’t make your payments on time. While a homeowner can be evicted following a single missed payment, it usually occurs after several missed payments. Each delayed or missing payment is considered a violation of the original loan agreement.
When the lender takes possession of the house, they will immediately make an attempt to sell it in order to recover some of the money they gave you. Once this occurs, there are several consequences that you’ll need to contend with, which include everything from an eviction to issues with your credit score.
Because you went through a foreclosure, your credit score likely wouldn’t be high enough to purchase a new home or finance a car in the foreseeable future. There’s also a small possibility that your lender will have an issue with a deficiency balance. If your lender sells your home but doesn’t receive enough funds to pay off the remaining balance of your loan, they might file a lawsuit against you to obtain the money you still owe.
You might only win this case if you have a high-priced attorney on your side and a judge who’s sympathetic to what you’re going through. However, it’s best to avoid this situation altogether by selling your house before it goes to auction.
How Does Foreclosure Work In CA?
The foreclosure process in CA is lengthy and occurs in several different stages.
The first step in this process occurs when you have a missed payment, which means that you now owe your lender debts. Whether you lost your job or simply forgot to make the payment on time, a short grace period will likely kick in immediately after you miss your first payment. Before the foreclosure process begins, you’ll likely be assessed a late fee.
If you cannot make the payment because you don’t have enough income, you may only be able to get to the next month before the foreclosure process begins. However, interest and late fees will build up. Falling behind on your payments puts you at risk of foreclosure. The terms of your loan dictate when you’re considered “in default” on the home loan. For the majority of mortgages, this occurs when you’re around 90 days late with your payments.
Once your loan is in default, your lender will need to submit a “Notice of Default” to the court. After the court has received this notice, you must be told about it within ten days. The document given to the court has full legal backing and will include details about the options you have to get out of default. For instance, you may have the option of paying back all of the debts you owe alongside fees and interest. You will also need to pay your property taxes and insurance.
Because of mortgage servicing laws, your lender usually needs to wait a period of 90 days before they send a notice to you or file a Notice of Default in court. If you cannot repay all you owe, your house will continue to be viewed as in default. Consider seeking government assistance or a forbearance plan that allows you to put off making your payments.
Once you’ve been given a Notice of Default, you’ll have 90 days to repay all you owe, putting you back in good standing with your lender. If you can secure these funds in time, you won’t need to sell your home.
Remember, however, that the debt you owe will include property taxes, insurance, and any fees. If you don’t make these payments on time, the bank will be able to set a final date on which your home can be auctioned. This date will be shown to you via a Notice of Trustee Sale, which is usually sent through certified mail.
After receiving a Notice of Trustee Sale, the bank will set a date for the auction. Before this date is reached, the home is still attached to your estate. Lenders must wait 20 days or more before an auction occurs.
It is also possible for the sale of your home to be officially postponed by the court or a bank for as long as one year, after which you’ll be given a new notice that a trustee sale will occur. Your house will then be sent to auction. During the auction, your house is sold to the person or company that makes the highest bid.
The Process Of Selling A House In Foreclosure In CA
If you work with a real estate agent, they should be able to give you a good idea of how and when you can sell your house before it’s foreclosed on. In most cases, the best time for you to sell your house is during the pre-foreclosure stage, when you have months before the bank begins the foreclosure process. This period occurs once you’ve missed your first payment but before you’ve been given a Notice of Default.
In this scenario, your home can be listed on the market by an agent who knows how to market homes and bring in buyers who will pay the listed sale price. You’ll also have time to make a few smaller repairs and clean your home. Your agent can give you information and suggestions on repairs that could substantially boost your home’s value. If any aspect of your home has sustained damage, it should be repaired.
By selling your house now, you’ll avoid foreclosure altogether, which means that your credit report shouldn’t be damaged too much. You’ll also be making this move on your timeline. If you happen to list your house later in the foreclosure process, you likely won’t be able to prepare it for sale, which means that it might need to be listed at a reduced price to sell it before foreclosure occurs.
Obstacles When Selling A Home In Foreclosure In CA
If you want to sell your CA house during foreclosure, there are some challenges that you must navigate. The potential obstacles to this process include everything from the rightful owner no longer being alive to the home being tied up in litigation.
If you’re set to inherit a house from a loved one’s estate, you should hire an attorney who will be able to help you navigate the probate process and advise you on all legal matters about selling an inherited home.
You might also find it difficult to sell your home during foreclosure if it’s currently part of litigation because of bankruptcy or a similar issue. The bankruptcy timeline in CA can differ depending on the complexities of the case. However, it usually takes three to four months. In this scenario, you must follow specific steps to sell your house before foreclosure occurs.
Unless you’ve worked as a real estate agent before now, you shouldn’t attempt to sell your property without the help of an agent. While there’s nothing that requires you to hire an agent, the process of selling a house before foreclosure involves the management of many moving parts.
If you’re looking to sell your house fast and don’t have any other solutions at your disposal, consider avoiding repairs if you want to ensure your house is sold before foreclosure.
Options Other Than Selling A Home In Foreclosure In California
If you do not want to go through the hassle of selling your home, there are several things you can do to avoid foreclosure, which include everything from modifying your loan to completing a short sale.
A loan modification may be your preferred option of the many alternatives available. However, you’ll first need to obtain approval from your lender. When you first applied for your loan, you signed a contract outlining how much you would pay each month and how long you would have to repay all your debts.
The bank will then place a lien on your property. If you decide to sell your house before the mortgage is paid off, your lender is given the remaining balance, which removes the lien. Modifications change the initial terms of your loan. However, these changes can vary considerably. They could involve permanent or short-term alterations to your term, interest rate, or monthly payment.
The purpose of loan modification is to make your monthly payments more manageable. If you want to avoid foreclosure and all the issues that come with it, you should consider asking your bank to modify the loan terms to allow you to continue paying your monthly dues on time.
This process can be complicated to handle independently because you must negotiate with your lender. Try to locate an attorney with experience with loan modification cases if you want to avoid making a mistake. Keep in mind, however, that you’ll need to submit your application for a loan modification around 45 days or more before the foreclosure sale is set to occur. If you miss any future payments, your lender will likely take steps to obtain the title to your home and sell it during foreclosure.
Refinance Before Foreclosure
Regardless of the number of properties that are currently in your estate, having one foreclosure on your record makes it difficult to maintain the loan on any other home in your estate, which is why it’s highly recommended that you look into refinancing before foreclosure.
In the event that your lender agrees to this request, you could receive an entirely new mortgage loan that comes with a lower payment and will help you avoid foreclosure. Most lenders don’t have any statements in their corporate policy that disallow refinancing if foreclosure proceedings have been initiated. However, the refinancing must take place before foreclosure.
Get a Deed in Lieu of Foreclosure
You might also consider obtaining a deed in lieu of foreclosure, which means you would provide your bank with ownership of your house. You would no longer be tasked with paying your debt and would be able to reduce the amount of damage that’s done to your credit score.
The main issue with this option is that you would lose your house. This type of agreement will remain on your credit report for four years. In comparison, foreclosure stays there for seven years.
Although less common for sellers going through foreclosure, you might want to consider a short sale. This process occurs when you sell your home for a lower amount than what you currently owe to your lender.
If your lender believes you’ll be unable to recover from the financial hardship you’re facing and that the property’s market value is lower than the remaining debt, a short sale may be approved. Just like the deed in lieu of foreclosure, a short sale has a minor impact on your credit score when compared to a foreclosure.
CA Foreclosure Resources
Here are some basic resources that should help you navigate the foreclosure process. Some of these resources are specific to the county that you’re in.
Sanaz Sarah Bereliani – (310) 882-5482
David S. Shevitz – (800) 551-7922
Aaron Michael Lloyd – (949) 544-9355
Vincent D. Howard – (800) 872-5925
Selling A House In Foreclosure In CA Common Questions
Before you start selling your house when it’s facing foreclosure, you should be informed about what the foreclosure process involves. The questions that are most commonly asked about foreclosure are answered below.
How Long Does It Take To Foreclose On A House In CA?
It takes around 200-210 days for the foreclosure process to be completed in CA. However, there can be a delay of up to a year, during which the home would remain in your estate no matter which county you live in.
How Do I Stop A Foreclosure Auction Immediately In CA?
You can stop foreclosure immediately by ensuring that all of the late payments you owe are repaid and made current. This is allowed until you’ve reached five days before the final foreclosure sale of your house.
Does California Have The Right Of Redemption After Foreclosure?
If your property is foreclosed through the judicial process, you can redeem the house within three months following the final foreclosure sale in the event the proceeds satisfy your debts. However, this can only occur when the court sells your home. This is a state-specific law and doesn’t vary by county.
Can I Sell My Home If I’m Behind On My Mortgage?
Yes, you can sell your home if you’re behind on your mortgage. However, you’ll need to have an offer in hand before the foreclosure sale occurs.
Easiest Way To Sell A House In Foreclosure In California
If you have further questions, contact an honest professional at Eazy House Sale. We can help you sell a house in foreclosure to a cash home buyer in CA. You’ll benefit from a hassle-free process, no damage to your credit, buy as-is even with belongings, and no repairs needed. These findings apply to all cities in CA, which include Seattle, Tacoma, Olympia, Vancouver, Spokane, Wenatchee, and more!