California Mortgage Foreclosure Defense Attorney
One of the most desirable achievements in America is buying a home. Many residents of California have worked diligently and tirelessly to attain their goals of owning their own homes. However, despite their efforts, some residents of California end up facing the prospect of their home being foreclosed upon. Knowing that you could lose your home is a stressful situation to be confronted with and many people struggle to find the best way to approach this situation.
The attorneys of The Bankruptcy Group are honored to serve the hardworking residents of California through what can be one of the most stressful points in their lives. Defending against a foreclosure in California and dealing with the possibility of bankruptcy can be daunting, but our lawyers possess years of experience in assisting homeowners through mortgage foreclosure and bankruptcy. Our team of legal professionals is ready to work with you to fight for your home. To schedule a free, no-obligation consultation concerning foreclosure, call foreclosure lawyers in California at (800) 920-5351 or contact us online.
Types of Foreclosures in California
Most people purchase a home by borrowing a portion of the purchase price, either from a bank or a mortgage company. Another option to finance a home purchase is using a home equity loan which borrows money against the equity in the home after it is purchased. In both of these cases, and most other cases, the lender receives a lien against the home to secure repayment of the debt. If a buyer fails to make timely payments and defaults on the loan, a lender can foreclose upon the home. Foreclosure forces a sale of the home and takes the proceeds to pay off the outstanding loan owed to the lender.
There are two types of foreclosures in California:
- Nonjudicial Foreclosure – A nonjudicial foreclosure is initiated when there is a power-of-sale clause in a deed of trust. This allows a trustee to sell a home on behalf of the lender once a mortgagor defaults on multiple payments.
- Judicial Foreclosure – Nonjudicial foreclosure is the most commonly used form of foreclosure and is usually preferred by lenders, because it is quicker and less costly than judicial foreclosure.
It is important for homeowners to know that a lender cannot simply institute a nonjudicial foreclosure on their own. The lender must contact you, and any other borrower on the mortgage loan, to assess your financial situation and discuss options to avoid foreclosure.
In fact, there are many safeguards for homeowners to avoid a lender who may seek to rush the foreclosure process along. For instance, a lender cannot institute foreclosure proceedings without waiting 30 days after contacting the homeowner. Additionally, the lender must advise you that you are entitled to a meeting to explore alternatives to foreclosure. Speaking with an attorney to represent you during these discussions is also allowable and encouraged.
If there is no power-of-sale clause in your deed of trust and a lender wants to institute foreclosure proceedings, they must accomplish that by filing a lawsuit for a judicial foreclosure. If an individual loses their home in a judicial foreclosure the court will order a sale of the house to the highest bidder.
Judicial foreclosures are somewhat uncommon in California, but if you are faced with losing your home in a judicial foreclosure, you may have an option to get it back. In California, if a person’s home is auctioned off in a judicial foreclosure, they have a right of redemption, which allows an individual to purchase their home back from the successful bidder at the auction up to one year after the sale of the home. California foreclosure law is filled with many nuances such as these which would be better tackled when partnered with an experienced attorney who could guide you through the process.
Bankruptcy and Foreclosure: Filing Chapter 7 or 13 as a Homeowner
Bankruptcy is another option a homeowner should be aware of when defending against a foreclosure. In some instances, Chapter 7 and Chapter 13 bankruptcy would be able to help a homeowner stay in their home, but often it is that Chapter 13 bankruptcy is more likely route to achieve that goal.
If a homeowner has more equity in their home than can be protected by California’s bankruptcy exemptions, Chapter 13 bankruptcy will certainly be more helpful than Chapter 7 bankruptcy. Chapter 13 bankruptcy entails a debtor forming a repayment plan to repay creditors. This plan often simplifies debt payments and allows a debtor to make consolidated payments to a trustee, who will then ensure creditors are paid appropriately. Other benefits of a Chapter 13 bankruptcy include:
- A three-year to five-year repayment plan, which gives a homeowner time to become current on payments.
- Potentially significant savings on payments to satisfy unsecured debts, which could free up additional resources to pay the mortgage.
- A Chapter 13 bankruptcy allows a homeowner to satisfy mortgage payments that are in arrears.
While a Chapter 13 bankruptcy may protect your home from foreclosure, filing for bankruptcy is not something which should be done hastily or without the assistance of an experienced bankruptcy attorney. Therefore, it is crucial to consult with an experienced Chapter 7 or Chapter 13 bankruptcy lawyer in California if faced with the threat of potential foreclosure.
When to Contact a California Foreclosure Defense Attorney
There is no one-size-fits-all answer for knowing when to contact a lawyer if you are facing a foreclosure in California. There are many different deadlines homeowners and lenders must stay abreast of in a foreclosure proceeding, which makes it difficult to know when you may need assistance. With that said, homeowners who consult attorneys earlier in the process may be able to take advantage of a wider range of options. A red flag that legal help should be sought is receiving a Notice of Default.
If you are worried about losing your house to foreclosure in California, the foreclosure defense attorneys of The Bankruptcy Group may be able to help. To schedule a free and confidential initial consultation, call our law firm at (800) 920-5351 today.