What is foreclosure anyway?
Foreclosure refers to the legal process that lenders undertake to reclaim property that serves as collateral for a loan, typically after the borrower defaults on the payments. Dealing with foreclosure can be a stressful and overwhelming experience. However, it’s essential to understand that it’s not the end of the road.
By understanding how foreclosure in Butte County works, you can equip yourself with the knowledge to navigate the process effectively and emerge from it in the best possible position. It’s important to note that the foreclosure process in Butte County can be lengthy and complicated, involving several legal steps and requirements that must be met.
At Butte Home Buyers, we understand that facing foreclosure can be daunting and challenging, and we’re here to help. Our team of experts can provide you with valuable insights and resources to help you navigate the foreclosure process in Butte County effectively.
We can offer you information on your options, such as loan modification, short sale, or deed in lieu of foreclosure, to help you avoid foreclosure and protect your credit score. Our team can also assist you in negotiating with your lender and representing you in court, if necessary, to ensure that your rights are protected throughout the process.
If you’re facing foreclosure in Butte County and feel overwhelmed and unsure about how to proceed, we can help. Contact us today at (530) 230-3560 to learn more about our services and how we can assist you in navigating the foreclosure process effectively. Our goal is to provide you with the support and guidance you need to emerge from the situation with the best possible outcome.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (530) 230-3560 or through our contact page to have us walk you through the specific foreclosure process here locally in Butte County.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll get a letter from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- If you don’t pay during the payment period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Butte Home Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Butte County, we can help you.
We buy houses in Butte County like yours from people who need to sell fast.
Give us a call anytime (530) 230-3560 or
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