Step1
Learn about the California Foreclosure Process and how it works:
BELOW IS A TIMELINE OF THE FORECLOSURE PROCESS IN CALIFORNIA
Step One, Day 0:
The process begins when a lender files a Notice of Default with the county recorder identifying the default amount and the date the borrower must pay off the default. The notice is mailed to the borrower and other affected parties.
Up to five business days before the trustee's sale, the borrower may pay off the default plus any applicable costs of foreclosure and stop the foreclosure process. Ninety days after the notice of default is filed, the lender can schedule a trustee's sale of the property.
Step Two, Day 90:
Ninety days after the Notice of Default is recorded, a Notice of Sale must be posted on the property and in one local public location.
The Notice of Sale is also published once a week for three weeks in a local newspaper, starting at least 20 days before the sale date. The notice is mailed to the borrower at least 20 days before the sale and to anyone who requests the notice.
The Notice of Sale must contain the date, time, and location of the sale, the property address, and the trustee's contact information. In addition, the Notice of Sale must be recorded with the county recorder at least 14 days before the sale.
Step Three, Day 111+:
The Trustee Sale Auction is held as a public auction at the time and place designated in the Notice of Sale, and conducted by the lender's representative. The successful bidder must pay immediately with cash or cashier's checks in the full amount of the bid. The successful bidder receives a trustee's deed on completion of the sale. The lender usually bids in the amount of the balance due plus costs. If no one else bids, the property reverts to the lender.
Step2
Learn your options for stopping foreclosure now:
YOU HAVE OPTIONS - LEARN ABOUT YOUR CHOICES
Now that you understand how the general foreclosure process works, let’s take a look at the options that exist to help you stop the foreclosure process:
>>> OPTION #1. Contact your existing lender
The first thing an owner in foreclosure may want to do is contact their existing lender. Some lenders are willing to work with those who have fallen behind on their payments and have defaulted on their loans.
Below are explanations of options that your lender may extend to you.
FORBEARANCE
Forbearance is an agreement between the lender and the borrower that reinstates the delinquent loan through the payment of a lump sum or a schedule of payments over a period of time. If a borrower is behind in his or her payment by $2,000, for example, the lender may allow the borrower to pay the money back through installment payments over six months. The lender may decide, on the other hand, to allow the borrower to pay a reduced monthly payment until the borrower has an opportunity to get back on his or her feet and pay any remaining arrearages in one lump sum.
The forbearance may be an oral agreement or written contract between the lender and the borrower. Generally these agreements will not exceed more than 12 months.
PAYMENT PLANS
A payment plan is similar to forbearance. In some cases when a borrower has fallen behind on their payments due to unforeseen circumstances including loss of employment, medical bills, or other financial hardships, the lender may agree to a short term payment plan, normally between 6 and 18 months.
Typically a payment plan will include the normal monthly payment amount, plus the back payments divided by the length of the term of the payment plan.
For example, if the monthly mortgage payment is $2,000 per month, and the borrower is $12,000 behind on their payments, a payment plan of $1,000 additional per month over 12 months may be offered. This would result in a new monthly payment of $3,000 per month over the next year.
Step3
LOAN MODIFICATION
A loan modification is a change in any of the terms of the original note. This includes decreasing the interest rate, re-amortizing the remaining balance, extending the term of the loan, or other options at the lender's discretion to assist the borrower through a temporary set back.
Generally a lender will consider a loan modification when foreclosure is eminent and the borrower's income has been decreased or unable to make the mortgage payments, but will be able to keep the loan current after the loan modification.
DEED IN LIEU OF FORECLOSURE
A deed-in-lieu of foreclosure is a voluntary conveyance of title to the lender. Generally this is a last ditch effort by the borrower to avoid the negative consequences of foreclosure. In return for the voluntary conveyance to the lender, the borrower is often released of any personal responsibility for the mortgage.
In order to qualify for a DIL, most lenders state that there must not be a second mortgage or junior liens on the property. Properties with values in excess of the amount owed against the home (to include normal closing costs) should consider selling the property before voluntarily conveying the home to the lender. A deed in lieu of foreclosure can have a slightly less negative impact on the homeowner’s credit score.
Step4
>>> OPTION #2. Mortgage Refinancing
Mortgage refinancing is an option where the lender would allow the borrower to refinance his or her existing mortgage, wrap in any late payments and fees, and cash out part of his or her equity in the home to allow the borrower to regain control of a debilitating financial situation.
Refinances are generally open to borrowers that face a temporary set back in their financial situation, have shown outstanding credit history in the past, and can prove that he or she can support the new mortgage payment.
Typically working with a broker who specializes in refinancing for owners in default is the best option as they have access to a large number of lenders who are more willing to work with borrowers who have fallen behind on their payments.
SECOND MORTGAGE / LINE OF CREDIT
A lender may offer a second loan or junior lien to a borrower in order to make up any back payments, late fees and other charges necessary to reinstate the loan. The borrower, in return, will be required to make an additional mortgage payment to cover the principal and interest payments on the second loan. Interest rates often rival credit cards and should be looked at with caution.
A borrower may also be able to borrower money from his or her bank or against a 401K or pension to use to repay the deficiency and reinstate the loan. Conditions generally do apply to these types of arrangements.
Step5
>>> OPTION #3. Sell your home
Selling a home is a good alternative for borrowers that are unable to reinstate their loan and face eminent foreclosure. This option allows a home owner to try to salvage his or her credit, pay off the loan(s), and retain any remaining equity in the home for starting new. There are two ways that a homeowner in default may want to sell their home.
SELLING VIA THE "TRADITIONAL METHOD"
Listing with an agent can be advantageous, especially in a hot market. By selling on the open market for full retail value, the homeowner can maximize their retention of equity. In a cooling market, however, it can be very difficult to sell a home before the auction date is set. Buyers can make lower offers, include multiple contingencies, and/or can demand that costly repairs are completed prior to the close of escrow.
SELLING TO AN INVESTOR
Selling to an investor has its advantages. Reputable investors have the ability to quickly and quietly buy your home at a fair price, saving your existing credit and allowing you to walk away with a lump sum of cash to start fresh. There are no fees, commissions, no long escrows, no home inspections, and no buyer contingencies. Though the selling price is typically less, the problem can go away almost immediately and virtually all risk in the transaction is removed.
>>> OPTION #4. File bankruptcy
Filing bankruptcy should be considered with great care. It stays on your record for 10 years and can have significant negative impact on your life for this duration. Due to recent law changes, many of the previous benefits of filing bankruptcy have been removed.
Step6
Take action!
Hopefully these instructions have given you a better understanding of the foreclosure process in California and how you can stop it. You may feel after reading this handbook that this is exactly the information you needed, and you know exactly what you need to do. Great! I’d like to urge you once again to take action now.
If you’d still like a little more guidance, I’d like to offer you a chance to take advantage of our Free Personal Evaluation. Have our team of professionals do the necessary research for you at zero cost to you. We’ll provide for you truthful, accurate research data from which to base your decisions on. This typically will take us about four hours of research and compilation – a $595 value for you. (We normally charge $1200 per day for our consulting services).
In your evaluation packet will be detailed market research data for you to base your decision on including:
• Mortgage Refinancing Options based on current market rates, your credit score estimate, and current financial capability
• Current retail value of your home based on market comps and average days on market for your neighborhood
• Investor Purchase Price Estimate
The biggest key to your success in this situation is taking action quickly. It is entirely possible that the plans that you had for paying off the mortgage and getting out of this situation aren’t going to work. The sooner you act, the more opportunity there is for you to find the best solution for your situation, save your credit, and get started on the next chapter of your life.
Sadly, many people just hope the problem just goes away. Five days before their house is sold on the courthouse steps, they call begging for help. At that point, the options are slim to none. Most of the time it is too late, and as the Sheriff escorts them away from their own home, they wish they would have done something sooner. Whatever you choose to do, don’t be one of those people.
If you are interested in having $595 worth of free research done on your behalf, do the following:
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Novice 
