FORECLOSURE ANSWERS -

THE LAWS, YOUR RIGHTS, AND YOUR OPTIONS

• The Process and Timeline in California and Utah

Missed payments:

The foreclosure process in California and Utah really begins after the first mortgage payment on real estate is missed.  After the first missed payment the lender will attempt to notify the borrower.  As the second and third payments are missed the phone calls and letters to the homeowner become nastier and more frequent.

The Notice of Default (NOD):

About 3-4 months after the first missed payment the lender becomes worried when their letters and phone calls are not effective.  To the lender, its now time to use the legal system to their advantage and the course of action is to use a Trustee to file a NOD (Notice of Default) with the county.  The NOD is filed with the county as public record and the homeowner and all lien holders are notified by certified mail.  This is the first legal step in the foreclosure process and from this point the clock is ticking.

The Notice of Trustee Sale:

After another 3 months the trustee, working for the lender, records a Notice of Trustee Sale with the county and mails the additional notice.  This means that a date is set for the auction of your home.

On or after 21 Days from the Notice of Trustee Sale:

The property is sold at auction at the courthouse if theres a qualified bidder, or sometimes the lender buys the house to sell to someone else.  In either case the former homeowner (you) is evicted by the county Sheriff.

• Your Options in Foreclosure

Please note that you will find bankruptcy not listed as an option because it is not really an answer.  Despite what slick attorneys may try to tell you, in many cases it only delays the foreclosure and ruins your credit even more than with a foreclosure by itself.  Bankruptcy is a good way for attorneys to make money for themselves, but it is a bad way for you to try to improve your situation.  A bankruptcy is an ugly mark against you for years to come and it will seriously damage your abilty to buy another home in the future.

Below are answers to your foreclosure problems and, depending on your situation, all have a chance of making a very positive change to a potentially disastrous situation.  Please take the time to study them closely then give us a call.  We're here to help you through this confusing, emotional, and embarrassing situation.

1)     Do Nothing.  The worst option (other than bankruptcy).  This option is often chosen by people who procrastinate and don't believe it is actually happening to them.  In the end, the sheriff evicts you from your home.  To add to your problems, the foreclosure and eviction go on your credit for seven years, making it almost impossible to qualify for another mortgage until that period of time has passed.

2)     The Rich Uncle.  Attempt to borrow the needed money to pay the back payments and penalties from a family member or friend.  [Be very careful.  Many families spend valuable time waiting for their "rich uncle" only to learn at the last minute that the family member isn't willing to risk that much money or really can't afford to.  This is the option many people take only to find themselves back at option #1 because they run out of time!]

3)     Traditional Lender.  Tap the equity in your home by refinancing or getting additional credit.  [There must be significant equity in the home and the home owner must have at least average credit.]

4)     Traditional Sale.  Contact a realtor to list the home for sale to a traditional buyer.  The advantage to this is you get the most money for your home.  [The challenge is the homeowner must have the time to list and sell the home, they must have equity so the agent can get a commission, and the home must be in good "selling condition".]

5)     Quick Sale.  Sell your home to an investor.  If you are in the foreclosure process you are no doubt getting lots of cards, letters, phone calls and visits from investors wanting to buy your home.  Don't just deal with the first guy who comes along.  Michael and D.C., the professionals at Action Home Solutions, are the right people to guide you through the process.  Their combination of integrity, speed, knowledge and fairness is your guarantee that you will make the best of a tough situation.

6)     Forbearance.  Balloon payment refinancing.  Make arrangements with your current lender to make up missed payments and penalties by a future date, such as within one or two years.  [This requires strong income to make up for missed payments.  This is usually done in the early stages of foreclosure.  The closer to the auction date, the less likely the lender will be flexible.  Additionally, the lower the borrower's credit score, the less likely the lender will consider this option.]

7)     Bridge Loan.  An untraditional loan that does not require good credit but works by utilizing the equity in your house to help you through a bad time.  [Requires some time for loan approval and significant equity in your home.]

8)     Refinance Current Loan.  This is done by adding missed payments to the back end of the loan.  [This is usually done in the early stages of foreclosure.  The closer to the auction date, the less likely the lender will be flexible.  Additionally, the lower the borrower's credit score, the less likely the lender will consider this option.]

9)     Delay Payments.  The lender allows you to restart payments, simply moving back the payoff date for the mortgage  [Rare.  Usually requires cash to pay off penalties, usually only allowed early in the foreclosure process and the lower the borrower's credit score, the less likely the lender will consider this option.]

10)     Utilize Loan Guarantees. (FHA, VA, or HUD)  If you mortgaged your home through VA, FHA, or HUD in rare cases you might be able to get their assistance in getting the loan reinstituted.  [Your loan must be between four and twelve months past due and you can prove you are able to begin making payments again.]

If there's little or no equity, poor credit, and youre more than a month past the Notice of Default date, your options become very limited.  Contact us - there are still a few of the above options available but time is your enemy.  If you don't act quickly, option #1 will be chosen for you. In the end, with little or no equity and poor credit, your best choice is often the

11)     Short Sale.  With our expertise and contacts within the banking industry, we can work with your lender to discount the mortgage.  If we can create enough of an equity position it is then valuable enough for us to purchase the home from you.  [This salvages your credit so you have the ability to get back on your feet within the next year or two and purchase a home again.  This option even works with zero equity or even if you're upside down in payments.  The key is time.  We must have the time to negotiate with the banks.  If we're too close to the foreclosure auction you may not be able to escape option #1.  Act now!]