Article Directory :: Finance & Investment Articles

3 Types of Foreclosure In California Law

Copyright © 2012 The Norris Group/ TNG Trust Deeds

Republish: EasyPublish™ Published: 23Feb2012 Word count: 490 Viewed: 46 time(s) Get Free Content For Your Site

There are three kinds of foreclosure in California law:

Judicial Foreclosure, Non-Judicial Foreclosure, and Strict Foreclosure. In each of the forms of foreclosure, a homeowner can keep his or her home if they make the required payments as well as covering fees and expenses. This is not likely, though, because foreclosures generally occur when a homeowner can no longer afford to maintain his or her current home.

Judicial foreclosure is handled through the courts. When a lender has made several attempts to work out a repayment plan with the homeowner, and the payments are still not being made, the lender can choose to file a lawsuit against the homeowner. Once the lawsuit has been filed, the homeowner does have a set amount of time to contest the foreclosure, but if the homeowner misses the deadline, the lender can continue the process with no contest. Once the court proceedings are complete, the lender may put the home on the market again. This process can take up to a year.

Non-Judicial foreclosure involves a trustee, or a trust deed investor who holds the deed as long as payments are being satisfactorily made. In this case, all a lender has to do is show proof to the trustee that the loan is in default, and then they can request that the home be put up for sale. The homeowner can file a lawsuit if they want to, but if the foreclosure is not contested, the home will be put up for sale within months.

Not an option in California, a third type of foreclosure, the strict foreclosure, is only legally recognized in Virginia and Connecticut. In this type of foreclosure, money made over and above the sale price after foreclosure will go back to the owner. In this case, other creditors that loaned money on the property, such as a contractor who wasn't paid in full, or another lender with a home equity loan on the property, will have the opportunity to take ownership of the home after paying the total of the remaining mortgage price.

In all of these cases, mortgage companies or lenders offer some options to the homeowner to keep their homes. Since the financial crisis in 2008, where many people faced foreclosures and whole neighborhoods were devastated by foreclosure- many lenders have "bailed out" homeowners in an attempt to keep neighborhoods from deteriating further. Of course, this has been an exception and not a rule, as many people ultimately did loose their homes.

In the event that the bank or lender is not willing to work with the homeowner, the home will be sold in the hopes that the lender might recoup their losses. This can be devastating to a family, and to their credit scores.

Hopefully this information will give you a leg up on the lender and help you stay out of a foreclosure disaster.

EasyPublish™ this article - publishers click here

More articles by Aaron Norris

Free Report!
Ten Essential Secrets Of Article Marketing ... Grab Your Free
Copy Now:

Need Content?
Regular Top Quality Content for your Blog, Ezine or Website ...
Delivered Direct,
For Free!
Click For Details