Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (normally a house) that secured the loan. This is done when the Lake Elsinore, 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 gather 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, mortgages which have not been refinanced are "non-recourse loans." This means that, in the event of default, the bank can take ownership of the house and sell it; but if the sale price happens to be less than the balance of the mortgage, the lender cannot go after the borrower for the remainder. Because of this, some people have found that their best option is to simply walk away from the home if the mortgage is more than the house is worth. You should talk with a Lake Elsinore, California attorney to see if this state is one of them.
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. You should keep in mind that banks normally don't want to take your Lake Elsinore home. They aren't in the real estate business, and expect to make money through interest on the loan, not by selling your house. If you are up-front with them early on, they will probably make a reasonable effort to accommodate your financial system if it will keep you from defaulting.
If you can't reach a solution with your lender, there are other options. You could, for example, try a "short sale," which allows you to sell your house for whatever amount you can get, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank will get the proceeds of the sale, and the rest of the debt will be forgiven. You may also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Lake Elsinore, California Attorney Help?
If you are worried about foreclosure, a good Lake Elsinore, California real estate lawyer might be able to help. A lawyer can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.