What is Foreclosure in American Canyon, California?
Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the American Canyon, California debtor has repeatedly failed to make their payments. Foreclosure usually requires the house to be sold at an auction. Usually, banks want to rid themselves of the property as soon as they can, in order to collect as much money as possible.
In every state, including California, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be overseen by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the entire balance will be covered, as well as the odds that there will be some money leftover for the borrower). In some states, original mortgages are "non-recourse loans," meaning that the lender can only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a American Canyon, California lawyer to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans which have been refinanced.
How Can I Avoid Foreclosure in California?
First, you should never ignore the matter. As unpleasant as it seems, it is essential to stay on top of the issue. Ignoring the problem will never make it go away. It is important to remember that the bank does not really want your American Canyon house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders generally treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. You might also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
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How Can A American Canyon, California Attorney Help?
If you are faced with the possibility of foreclosure in American Canyon, California, an attorney might be able to help. At the very least, he or she can advise you of your legal options.