Understanding Foreclosure Laws
In California, if a borrower is in default on mortgage payments, a lender can pursue either judicial foreclosure or non-judicial foreclosure. Each type of foreclosure provides different rights and obligations for the owner and the lender.
Judicial Foreclosure
If the deed of trust does not give the lender the power to foreclose, the lender can sue the homeowner in a court of law for repossession of the property. Both the lender and homeowner must appear in court to resolve the matter. If the court sides with the lender, it will issue a judgment for the amount due on the loan, as well as for the foreclosure process.
This type of foreclosure allows the lender to pursue a mortgage deficiency from the homeowner. That means that after the foreclosure, the lender can file a lawsuit against the borrower insisting that he or she pay the amount remaining on the mortgage loan.
Judicial foreclosures are fairly rare, as they can be lengthy and costly proceedings.
Non-Judicial Foreclosure
Non-judicial foreclosures are much more common than judicial foreclosures. In this process, a lender can seize the borrower's property without going through the court system.
When a borrower falls behind on his or her mortgage payments, the lender issues a notice of default. This gives the borrower a specified amount of time to pay the past due amount or face foreclosure. If the owner does not pay the arrears, the lender is free to set a sale date and proceed to auction the house.
In this process, lenders give up their right to collect a deficiency judgment against the homeowner. However, lenders frequently prefer this method of foreclosure, due to the expedited timeframe and minimal costs.
At Simon & Resnik, we know how to use this process to your advantage, turning the tables on the lender and putting leverage back on your side.
Consult With a California Foreclosure Attorney
To learn more about the foreclosure laws and mortgage debt in California, speak with an experienced bankruptcy lawyer at Simon & Resnik, LLP. Call 310-598-7365 or 888-368-4099, or contact us online to schedule your free consultation. From our offices in Los Angeles and Sherman Oaks, we represent clients in Los Angeles, San Fernando Valley, Riverside, San Bernardino and Orange Counties.
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