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 Santa Clara County, 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 collect 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 Santa Clara County, California to find out if this is the case here. This usually does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in California?
Most importantly, you must not ignore the problem. Doing so will not make it go away, and will probably make it worse. You should stay in close contact with your bank, and be honest with them. One should remember that banks generally don't want to take your house in Santa Clara County. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are honest with them about your financial situation, they are likely to make reasonable accommodations to prevent you from defaulting.
If you can't work anything out with your lender, or have become completely unable to make any mortgage payments, a "short sale" might be a good option. This allows you to sell your house for whatever price it can get, and hand the proceeds over to the lender. If the sale price is less than the balance of the loan, the rest of the debt might be forgiven. A "short refinance" might also be an option in some cases. This allows you to have some portion of the debt forgiven, while refinancing the rest.
How Can A Santa Clara County, California Attorney Help?
If you are facing the possibility of foreclosure, a good Santa Clara County, California real estate Attorney can help. At the very least, they will be able to inform you of your legal options.