One misconception is that foreclosures occur more quickly than they do. In my experience, from the time you first miss a monthly payment until you end up with sheriff’s officer outside your house with new locks to evict you can range anywhere from 9 months to a year. The time it takes a lender to initiate the campaign, try to make phone calls to talk to the debtor to discuss and consider modifications until the lender initiates and concludes the formal foreclosure process is a 9-month to a 1-year process.
Another misconception regarding foreclosures is that they require some sort of court action. Most foreclosures are non-judicial, and can be processed without ever having to go in front of a judge.
A third misconception is that foreclosures are easier to enjoin than they really are. You imagine that it’s easy to go in front of a judge and get a court order to stop a lender from foreclosing but getting an injunction against a foreclosure is difficult to do and relatively expensive. Therefore, getting an injunction to stop a foreclosure is rarely attempted; it should only be attempted when there is a clear failure on the part of the lender to follow proper procedures or there is some solid reason the foreclosure should not proceed.
A fourth misconception is that, if a foreclosure occurs, you should go out and immediately hire an attorney. In most foreclosures, an attorney won’t be able to do a great deal for you, other than perhaps act as an intermediary between you and the lender to discuss loan modifications. That tends to get expensive and often does nothing more to advance the cause to that lender than you could accomplish on your own.
What If the Bank Does Not Cooperate With Me?
California law requires a lender to attempt a good faith loan modification effort. Often times an agreement will be reached through that process. Remember lenders don’t want to foreclose if it can be avoided.
If you are unable to reach a modification agreement with your lender you can consider seeking a state court injunction to stop the foreclosure. However, an injunction is difficult to get and very chancy, since there is no guarantee the court will grant it. If an injunction is not obtainable (because the root problem is you inability to make payments) you should contact a bankruptcy attorney and discuss whether it makes sense to file a Chapter 7 or 13 bankruptcy, which will place a temporary stay on the foreclosure while you try to refinance the loan or sell the property to get any equity out and avoid losing it through foreclosure.
What is the Difference Between a Judicial and a Non-Judicial Foreclosure?
A judicial foreclosure is processed through the court system as a standard civil lawsuit and is designed to not only foreclose on the property but to ultimately get a money judgment against the borrower for the deficiency amount.
A non-judicial foreclosure is one that is processed outside of court through a title company. By law in California, if you foreclose non-judicially, you cannot get a deficiency judgment against the borrower. Non-judicial foreclosures are most common in instances in which the property being foreclosed on is a residence subject to “purchase money” protections or where there is enough money in the property to at least cover the amount owed on the loan and there is no need to seek a deficiency judgment.
Non-judicial foreclosures are intended to happen more quickly than judicial foreclosures, although that’s debatable because of the inevitable delays that exist in both processes. In a judicial foreclosure, you have the advantage of having the matter in front of a judge, who can often times move the case along more quickly than in a non-judicial foreclosure.
For more information on Misconceptions About Foreclosure, a free initial consultation is your best next step. Get the information and legal answers you’re seeking by calling (916) 635-0302 today.