Here is a site that provides some good information for borrowers in distress.  This site provides information on foreclosure timelines in California and provides links to resources.  Foreclosure in California

There is also information here for renters / tenants in foreclosure situations.  Do you know your rights as a renter? What happens to your lease in a foreclosure as a tenant?  How much notice must the bank rep give you following the foreclosure?

Avoiding Foreclosure

Tenants in Foreclosure and Eviction information

California – Contra Costa Foreclosure Timelines – Q & A from Housing and Economic Rights Advocates (HERA)

Foreclosure HELP links for borrowers in Contra Costa, Alameda and other California counties

. . . on the decision to foreclose or short sale that is.  You must seek counsel of an experienced real estate professional, a qualified tax professional and/or an attorney before making any decisions as to whether to foreclose or attempt a short sale.  Both can have pros, cons, consequences and benefits.  Believe it or not, sometimes foreclosure is the right answer.  Often a short sale is the best solution as it enables you to negotiate up front with the lender for any future recourse.

1. Logistics - there are distinct differences as to how your occupancy of your home will be handled.  In a short sale, you will have to move when the home is sold.  In a foreclosure you may be able to stay months before the sheriff comes knocking on your door during the final steps of an eviction.  Do you know when you’ll have to move?  What is your strategy to secure housing if your credit will be destroyed?
2. Paperwork - in a foreclosure, folks just walk away.  In a short sale, there is a lot of paperwork involved.  Do you know what you need to to assemble in order to ask a lender to accept a short sale?
3. Hardship - did you know that there are many reasons people are in the situations they’re in now with their mortgages?  Does it qualify YOU for a short sale?
4. Scams - did you know that scammers are good at what they do?  Did you know that smart people are signing over the deeds to their homes without realizing it does not relieve them from the obligations they have with the bank?
5. Assets - do you own other assets besides the home you’re in trouble with? Is there a way to protect your other assets (other homes, boats, cars, etc) in either a foreclosure or a short sale?
6. Retirement – most homeowners also have money in their retirement accounts.  Can you still do a short sale with monies in retirement accounts?
7. Privacy – did you know that once a Notice of Default is filed, it is public record? Did you know the Notices of Trustee sales are public notices too?  How can you avoid it getting to that point and maintain privacy in your financial matters?
8. Taxes – did you know that just walking away (foreclosure) may not alleviate your tax liability? Did you know that only some homeowners will feel the effects of the Mortgage Debt Relief Act of 2007?  Can you qualify for Federal tax relief? What about the State?
9. Recourse – did you know that only your purchase money loan(s) is considered a “non-recourse” loan in California? Did you know a “recourse” loan means that the lender can file for a judgement against you if you do not pay your obligation?  Will you be protected against recourse and monetary judgements if you foreclose, or do a short sale?  Are your loans recourse or non-recourse?  Is there a reason to let one of your loans foreclose (i.e. your second) and not the other? (YES there is!)
10. Fraud – did you do a “N-I-N-J-A” loan (No Income, No Job, No Assets), or an all stated income loan with little/no documentation?  Did you fib? At all? Did you bolster your income or assets to get the house? Did you know that is fraud?  And that there is a window of opportunity for the bank to go after you whether you foreclose or short sale if they suspect fraud?  Are you protecting yourself?  What is YOUR best course of action?  

Oh oops, one more:

11.  Bankruptcy – sometimes, for some people, bankruptcy is a solution.  Have you talked to an attorney about the benefits and consequences of filing for Bankruptcy protection?

Realize that for all of these top ten eleven reasons above there may be ten others SPECIFIC to your situation.  NEVER is ignoring the problem the right answer.  The consequences of either a short sale or foreclosure can be significant and can haunt you for years. 

If you need the answers to these, or other questions, call the professional short sale team of Catherine Myers and Terry Osburn of Alain Pinel Realtors in Walnut Creek.  Call 925-683-2125 or 925-381-9944. Or CONTACT US by navigating to our contact page on our site here (see above).

Serving Contra Costa County, and some areas of Alameda and Solano County. 

(Walnut Creek, Danville, San Ramon, Alamo, Lafayette, Orinda, Moraga, Pleasant Hill, Martinez, Concord, Clayton, Bay Point, Pittsburg, Antioch, Oakley, Brentwood, Benicia, Vallejo, Dublin, Pleasanton, Livermore)

Or use someone who does!

I just got off the phone with a very nice person who was a little confused. As the story goes, she and her husband decided had saved up a bit of money and wanted to capitalize on the current market conditions. It’s a great time if you are looking for bargains.

They attended a Trustee Sale (foreclosure auction). Cashiers checks in hand, you can imagine their surprise when their bid actually won the 3 bedroom, 2 bath house!

It was close to their home, they knew the area, but hadn’t actually viewed the property. The best part? The home was reported to be worth in the high $400,000 range. Their bid? ONLY $40,000! They had struck gold on their first auction! It was just like the ads on TV!

The sale was recorded. The papers signed. A $480,000 home, bought sight unseen, for only $40,000. How bad could it be?

As you might expect the house was a little run down. A couple of months of hard work later they had the trash hauled away, the rooms painted, the landscaping done. It was just about time to find a renter.

That’s when they found that little yellow card tacked on their front door. It was a Notice of Default, the first step in a California foreclosure procedure.

But they paid cash. They didn’t have a loan. How could anyone foreclose on them?

As it turns out, what they bid on in the auction was the Second Trust Deed. The house was abandoned, heading to foreclosure. It had a first and a second mortgage. They paid $40,000 for the second – but the first was still in place and tied to the property.

Now the owner of the first mortgage was foreclosing on the property to recover the unpaid balance of the note. Guess what? They have every right to do it! If the property does foreclose it’ll be sold once again on the county courthouse steps. These people will probably lose their $40,000 as well as every dime they put into the rehab.

The State of California has a well defined hierarchy as to which lien takes priority over other liens. Here is a quick run down: California Lien – ing

As you can guess, had they used the services of a professional, the outcome would have been very different. I am reminded of a long favorite quote by Brian Brady, “If you thought dealing with a professional was expensive, wait until you find out how much dealing with an amateur costs.”

I think they just did.

Always use a Professional.

If you find you are getting behind in your mortgage there are some important “Don’ts” associated with the pre-foreclosure process. If your situation is temporary, talk to your lender. They often want to avoid a costly foreclosure as much as you do. If not, and you have a genuine hardship, keep reading:

1. Do not deed your home to someone else without assuring the loan is paid off and out of your name.  Merely transferring the deed to your property does not relieve you of your obligations to the bank.
2. Do not do nothing.  This is about the worst thing you can do though it may be your first reaction when things start to get overwhelming.  The truth is you may have many options available to you, but you must explore them.  Get a professional real estate agent to help you explore options such as the sale of your home, a short sale, or just to get some cheerleading and guidance toward working out a catch up agreement with your lender(s).  Know your rights, know your options.
3. Do not ignore the notices from your lender.  These notices provide important information about ways to resolve any delinquency issues, plus vital timeframes you need to know.  They also provide important contacts and phone numbers that may prove useful to you or your real estate professional in structuring an amicable resolution.  Open your mail. Keep the lines of communication open with your lender.
4. Do not fall for a scam.  Beware of “we pay cash for homes” type advertising. Beware of people offering to “buy” your house and then let you stay as a renter.  There are a lot of scams out there now, but remember the rule “if it sounds too good to be true, it probably is.”  There is no quick fix.  Be wary of ANY investors approaching you to help you out of your problem. 

It is easy to become paralyzed or to “give up” if you feel that foreclosure is your only option, but at least seek the counsel of a professional real estate agent with experience in the pre-foreclosure and/or short sale process.  A consultation is FREE (don’t let anyone charge you) and it is worth your time to explore your options.

Catherine Myers
Alain Pinel Realtors
www.DiabloValley.net

Terry Osburn
Alain Pinel Realtors
www.TerryOsburn.com

Your Contra Costa Short Sale specialists.  Serving Walnut Creek, Concord,
Pleasant Hill, Martinez, Clayton, Antioch, Brentwood, Pittsburg, Oakley,
Bay Point. . .