What is Foreclosure in Carlsbad, California?
Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (typically a house) that secured the loan. This is done when the Carlsbad, California debtor has repeatedly failed to make their payments. Foreclosure often requires the house to be sold at auction. Often, banks want to get rid of the property as soon as they can, in order to make as much money as possible, and move on.
In all states in the U.S., including California, there is an option to go through foreclosure via judicial sale, in which a court oversees the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that might have a lien or other interest in the property (in order of priority), and, finally, to the borrower, if anything is left. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an attorney in Carlsbad, California to see if this is the case. However, this typically doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in California?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Carlsbad don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are forthright with them, lenders will typically try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't work things out with your lender, there are other options. You could try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still gets those proceeds, but the remainder of the loan will be forgiven. You might also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a relatively small loss, and allows the homeowner to keep their home.
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How Can A Carlsbad, California Attorney Help?
If you think foreclosure is imminent, a good Carlsbad, California attorney might be your best hope for staving it off. Even if keeping the house proves impossible, a good lawyer can minimize the financial effects.