Monday, April 02, 2007

Tips On California Foreclosures

The Desert Sun reports from California. "It pays for homeowners, and investors interested in distressed properties, to understand how the foreclosure process works in California. There are often good deals to be found on homes, but also plenty of pitfalls, said John Sloan, Realtor in Palm Desert."

"At a recent public auction for a home in Riverside County, Sloan said the new owner discovered some disturbing news. 'They found out the guy (previous homeowner) also had over $2 million in liens by the IRS,' Sloan said. 'That puts the new owner in a lot of jeopardy.'"

"Here are tips from area mortgage lenders and real estate agents on navigating the process. Once borrowers fall three months behind on payments, the foreclosure process typically begins in earnest. Lenders send a default notice to the borrower, county of residence, and anyone else who has an interest in the property, including a financial institution that holds a second mortgage."

"The notice is filed with the county recorder's office, as well as published in certain newspapers and online. The lender files a Notice of Trustee sale with the county 90 days after the default notice is sent out, and the property owner gets letters."

"Notices of default for Riverside, San Bernardino, Los Angeles, Orange and other counties are published in the legal newspaper the Daily Commerce, as well as other newspapers and paid Web sites."

"A foreclosure date is set (it must be at least 104 days after the original default notice is sent) for those homeowners who can't pay. A homeowner can pay off late mortgage payments up until five days before the closure sale."

"When an auction to sell the home takes place, county officials oversee it. Proceeds are used to pay off the mortgage and other debts secured by the house. Buyers at auctions typically purchase homes based only on what they see on the outside."

"Payment for the entire bid must be made by cashier's checks. Many banks won't finance foreclosure bids, partly because homeowners may not let appraisers inside before the auction."

"When no one makes a minimum bid on a home, the property reverts to the lender. Lenders often turn to real estate agents to sell those properties."

"Investors can and often do try to buy homes directly from homeowners before an auction. A foreclosed homeowner gets the leftover money from the auction - if there is any. Debt that is left over, in some cases, is the responsibility of the new owner."


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