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 Richmond, 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, foreclosure by judicial sale is allowed. Under this system, the sale is overseen by a court of law, to ensure that the bank makes a reasonable effort to get a decent price at the auction, and that any proceeds above the balance of the mortgage go back to the borrower. In some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take ownership of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the debtor for the remaining balance once it sells the house. You should consult a Lawyer in Richmond, California to find out if this is the case here. This typically does not apply if the mortgage has 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. You should keep in mind that banks typically don't want to take your Richmond 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 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 usually 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. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A Richmond, California Attorney Help?
If you are facing the possibility of foreclosure, a good Richmond, California real estate Attorney can help. At the very least, they will be able to inform you of your legal options.