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What are the ramifications of foreclosure

what are the ramifications of foreclosure


Best Answer: California is a trust deed state. That means that the traditional foreclosure process there has the trustee selling the home without a court order. There is a standard process followed. The borrower would have agreed to this when they signed the loan document. The benefit to the borrower is the lender can only take the house. If the property ends up selling for less than the lender was owed the lender can take no further action.

If the lender uses a judicial process the foreclosure process takes a lot longer. Using a judicial process keeps the door open to the lender to sue for any shortfall when they finally sell off the house. The judicial process is a lot more work for the lender so CA lenders will rarely go that route.

As was noted by someone else you should clearly focus on getting the place solid prior or finding a way to make and keep the payments current.

A short sale is where you agree a sale with a buyer and the lender agrees to take less than they are owned. The lender will consider this option when they are looking at a loss if there is a full foreclosure.

You can sell on terms or other

creative structure if the buyer really can perform. Most of the time this means the loan is caught up and then 1-2 years later the buyer finds a way to sell on the property (paying off the loan) or refinances. Not the best idea in some cases. It clearly is an option in other situations.

Note that having a foreclosure on your record means that you are going to face problems when trying to buy a home or even obtain credit for other purposes. A foreclosure will leave a bit hole in the credit file and will drag down your score for some time to come.

As dire as it might seem really do your homework so you check all the options. Try not to make a bad situation worse and do plan for the future.

This site is for RE investors. There are a number of how-to and other free documents. There are also a number of forums including one for legal questions and one for general RE questions. There are a number of CA investors there. Many are honest and open to discussions as to what your options could be. The specific facts of your situation matter so expect to have to spell out the details if you want specific advice.

Category: Insurance

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