If you’re worried about losing your home to foreclosure and falling behind on your mortgage payments, there are some financially strategic things you can do to save your home. It is best to learn about the foreclosure laws in our state and understand the well-researched case law. You should probably immediately seek the professional advice of a bankruptcy attorney who has dealt with these issues if you want to avoid foreclosure.
Did you know that once you file a Chapter 7 bankruptcy in California, the bank cannot perform a foreclosure sale during the proceeding, which takes 3-4 months? The lender can ask the judge to circumvent that general rule and foreclose early or ask for a foreclosure sale, but it is rarely granted without extenuating circumstances.
In Chapter 13 bankruptcy, you will have to keep up with your mortgage payments and/or make a deal with your lender, otherwise the lender can ask the judge to foreclose anyway. Depending on your relationship with your lender and their good faith, the judge sometimes allows it. Again, it’s best to ask your bankruptcy attorney what to do and how to do it to give yourself the best chance of keeping your home when you’re done.
Can you stay in your home after a foreclosure in California?
It turns out that you can stay in your house after foreclosure and until the final sale, even though that would be closing the deal. Generally speaking, after a foreclosure, the actual sale takes anywhere from 2 months to a year. This is the case for both judicial and non-judicial foreclosures.
In fact, in California, there is a terrible problem where the family that once lived in the house before the foreclosure leaves as requested, but then a new party, a homeless squatter, moves in and stays. in the house until it is sold, often even the new owners try to move out. Sometimes the new owners have to go and get an eviction notice, which also takes time. It’s an interesting world we live in, but that’s what’s happening here in California.
In Ventura County, there have been a large number of cases where this has happened. Squatters learn about loopholes in the law on the Internet, often by watching YouTube videos. Some of the advice is rubbish, some is valid. Either way, it’s causing a problem in neighborhoods around the Ventura County area and in nearby adjacent neighborhoods that are in Los Angeles County.
Can You Buy a New Home After Filing Chapter 7 Bankruptcy?
The answer to this question might surprise you. After all, people assume that filing for bankruptcy is the kiss of death, and your credit will skyrocket forever or at least a decade. Not so. In fact, 24 months from the date your bankruptcy is completed, you may be able to qualify for a home loan and mortgage as long as you have adequate income at that time to pay the loan payments.
For Chapter 13 bankruptcy, the situation is similar, but there are other things you need to know and you should contact a bankruptcy attorney in your area who specializes in these places to get all the details right.
What can I keep of my house if the bank forecloses?
This is a very important question, and if you get it wrong, you could end up in jail for grand theft. You cannot carry solar panels, water heaters or any built-in appliance. Don’t try to take garbage disposals, trash compactors, cooktops, dishwashers, or air conditioning systems. You cannot take burglar alarms, smoke detectors, or smart home systems that are built into the home as an integrated system. You can bring TVs, refrigerators, and washers and dryers.
You cannot bring an outdoor patio system that is anchored to the house on one or more sides or at the top. Basically, the law says that you cannot take anything attached to the building or land. Again, take these rules seriously, and if you have any questions, consult your bankruptcy attorney. If you have to leave and you have exhausted all other avenues, do it right. You don’t want to start your fresh start with a new criminal conviction; That doesn’t look good on any resume.
There are Ways to Prevent Foreclosure in California
The easiest way is to ask your lender for a loan modification. The bank doesn’t want to get your house back, they just want to get paid. Therefore, it is in their best interest to reach a favorable agreement that will keep you making payments again until the mortgage is paid off. Sometimes lenders won’t budge an inch on the first request, but when an attorney contacts them on your behalf, it’s amazing what you can negotiate.
If you pay your mortgage, the lender can’t foreclose, obviously, which is one more option. Get a loan from another source and pay off the mortgage. You can also sell your home in a short sale or for the remaining amount of the mortgage. Although you won’t get any principal back, your credit will be excellent after you’ve paid it off.
Other considerations
After the 2008 housing crash, many managers made paperwork mistakes. The court no longer takes your word for the borrower. If they made a serious mistake, your lawyer will now be in a very favorable position to negotiate for you. At the very least, your bankruptcy and foreclosure attorney will get the lender starting the process over again, and at best, it could save you tens of thousands of dollars and a truly stellar renegotiated mortgage rate and terms. Make sure you learn all the facts.