If you have tried to purchase a house in California, you have encountered an instrument known as a deed of trust. This deed involves three parties; the borrower, the money lender, and the neutral third person who gets foreclosure rights if ever they arise. This is the basic tool used with regards to CA foreclosures.
It will also usually include a power-of-sale clause which allows the third party the actual right to enforce the overall collection of your debt. This is then enforced by the lender in a sale of the house if you fail to make your mortgage payments in a timely manner.
When you default on your mortgage loan, the foreclosure process begins. There is a 20-day notice period in which the borrower must get a notice of pending foreclosure. During this process the lender will take over your home in an effort to recover the principal investment. Once your home has been either sold or in some cases repossessed by the lender you must then vacate the home.
If what you have agreed upon was a non-judicial foreclosure, the trustee will need to fulfill certain requirements before they can sell the property. Contrary to how it sounds, this is actually a pretty fast and simple process. It is not necessary for the trustee to get a court order before they can ask you to vacate or any order from the court before they can sell the property. This kind of foreclosure happens if there was no power-of-sale clause in the deed of trust.
In California practices, a non-judicial foreclosure usually starts after the lender sends you a notice of default. This is simply a letter stating that you have not been able to pay your mortgage debts. It serves as the formal notice that the lender now eyes foreclosure as a possible way to recover what they have lent you.
This type of foreclosure can occur anywhere from a week to several months after you have actually missed your first mortgage payment. Once this procedure has begun you will not have right to stop the proceedings. However, you can get your property back if the original lender did not include the full price in the bid and you pay the sum of the unpaid loan as well as the cost procured over a year from the foreclosure sale.
The important thing for you to know is that the moment a legal action has been filed against you, even if it is on foreclosure, it stays in your legal records. Your credit evaluations will also take a hit for at least the next couple of years, meaning that it will be very difficult and expensive to get a home loan during this time. In fact, it might even be impossible. Any other loan and credit facilities that you have will also be impacted.
To avoid losing your property, which you certainly worked hard to earn, it is advisable to choose a mortgage program that will offer you low interest rates over a longer duration of time. Paying your mortgage on time is essential or else you too stand a risk of losing your home.
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