Redding Short Sale Team

Many families in Redding CA and across the nation are facing the short sale of their home or even foreclosure.

How is a home foreclosed on in the State of California?

• First the home owner has missed mortgage payments.

The reasons are many and vary for missing the payments. The home loan lender may work with the home owner to modify the payments or loan structure so the home owner may remain in the property and catch up or continue to make the new mortgage.

The lender on the home may also co-operate on selling the home for less then the amount owed on it.

This is called a “short sale”.  The phrase short sale refers to the bank getting paid “short” or less then the amount owed on the property.

A short sale is anything but short in the sense of time frames.  A short sale will take several months, general any where from 3 to 9 months. During this time period the current home owner is encouraged to stay in the home to keep it maintained and not leave it vacant.

The length of time it will take, it dependent on how many loans or liens are on the home and how many lenders have to agree to the short pay off.

Some homes have two loans on them with two seperate lenders, such as Bank of America and maybe Well Fargo, for example.  All this means is both lenders will have to agree and this usually takes some time for both to cooperate.

The lenders , sellers and buyers will have to be patient thru this process.

The home owner will receive a Notice of Default often times this is referred to as an NOD.

This notice will advise the borrower of the amount that is owed and how and where to catch back up the payment.

If the payment is not made current, a Notice of Sale will be posted on the property.

The Notice of Sale can be very stressful. On the notice there will be a date posted that the property will be sold at auction. It will state the time and place of the home auction.

The sale date can be a early as 20 days from the recorded notice but is often time 31 days.

Contacting the lender is important. The lender may postpone the sale date if the home owner chooses to cooperate in a short sale or some other programs available to the distressed home owner.

Some options to postpone the foreclosure.

• Pay up the loan and pay off any deliquences and past due amounts.

This is often times exteremly if not near impossible for most distressed home owners. For various reasons ranging from unemployment, illness or divorce.

• Sell the home

The property may be sold. If the home can be sold for enough money to cover the debt this would be considered a traditional sale. If the home is “under water” or there is more money owed on the property then it can be sold for in the current real estate market the lender may accept the short sale.

Working  with the lender

• Loan modifications.

This will change the terms of the payments. This could be done several ways from adjusting the monthly payment or maybe evening extending the life of the loan to make it more affordable.

• Forbearance.

The lender may choose to temporarily forgive the penalties and collect at a set date later. This is usefully if the home owner became unemployed but it now currently working and just needs some time to update the loan.

• Repayment Plan.

 Another way to work out past dues.

• Deed-in-lieu.

This is where the owners freely give back the property to the bank. The bank does not have to foreclose on the property, the current owner just gives it back.

• Bankruptcy.

Bankruptcy or “BK” really only delays foreclosure. A BK attorney will discuss options in this situation.

These options and others  should be weighed carefully, and discussed with counsel as it impacts your life, credit and ability to obtain future loans.

Contact us for a free, private consultation that may give you the resources you need inorder to make this difficult choice about foreclosure or short sale in Redding CA.