How Long Can I Stay in My Home After Foreclosure in California?
After doing everything you possibly can to avoid foreclosure, including talking to your lender about a loan modification plan, you will very likely have to leave your house. In the state of California, the most common foreclosure process is the "nonjudicial" process, where a foreclosure is conducted without court action. Generally speaking, you have about six months to vacate the premises. Most nonjudicial foreclosures in California take an average of 120 days to complete.
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Procedure
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You will first receive a Notice of Default, an official statement declaring that you are behind in your mortgage payments. Three months and 90 days later, if you haven't worked out a loan modification plan, you will be served a Notice of Sale. The new owner, either your lender or someone who bought the house at auction, will then send you a three-day Notice to Quit. If you don't leave within that period, the new owner will serve an eviction notice, a court process that can take just a few days or up to 45 days.
New Law
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Under the new California Foreclosure Prevention Act (March 2009), most lenders are prohibited from giving a Notice of Sale until the lapse of three months plus 90 days after filing the Notice of Default, part of the state's effort to reduce foreclosures. Previously, lenders could file a Notice of Sale three months after serving a Notice of Default. Check to see if your lender is exempted from this requirement.
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Cash for Keys
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In this situation, you and your lender agree that you will leave the property on relatively good terms. You receive cash in exchange for leaving your home cleaned, in good condition, and not vandalized. This deal gives you a specific set of expectations and a time frame in which you need to move. And the funds you receive can go toward moving costs. If you go for this option, remember to get everything in writing and all funds before vacating the premises. This option also applies to tenants who are victims of foreclosure against the homeowner.
Exceptions
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You do not have to leave if you and your lender have reached a loan modification agreement, or if you have entered a bankruptcy case and the presiding court has not yet rendered a decision.
Warnings
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The only person who can make you leave is the new owner. If you don't have the new owner's name, visit the local county recorder's office for that information. You can also contact the trustee on the Notice of Sale for the new owner's identity.
Reminders
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If the entire process sounds deeply confusing, don't panic. California's foreclosure laws bewilder even real estate agents and lawyers who specialize in the realm of foreclosures. Remember that during the foreclosure process, you are always encouraged to speak to your lender to work out an agreement to reinstate your loan and help you keep your house.
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