Foreclosure is the legal procedure 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 Castro Valley, 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 forward.
In all states in the U.S., including California, there is an option to go through foreclosure via judicial sale, in which a court supervises the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that may 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 borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Castro Valley, 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 dismiss 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 Castro Valley 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 believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Castro Valley, California Attorney Help?
If you are worried about foreclosure, a good Castro Valley, California real estate attorney may be able to help. A attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.