Distressed Sellers

A STEP-BY-STEP GUIDE TO WHAT TO EXPECT WHEN YOUR HOME IS IN DISTRESS

A STEP-BY-STEP DISTRESSED HOMEOWNERS GUIDE

Navigate the intricate process of selling distressed properties with our comprehensive guide. Gain clarity, make informed decisions, and face the challenges head-on, turning them into opportunities for a smoother transition.

Step 1: Missed Payments

Life's unexpected challenges can lead to the unfortunate circumstance of missed mortgage payments, triggering the distressing journey into foreclosure. When financial stability falters, it's crucial to understand that missed payments are the initial indicators of potential difficulties. Acknowledging this early on allows homeowners to proactively seek assistance, explore options, and begin the process of navigating the complexities associated with financial hardship.

Step 2: Early Delinquency Period

Following the initial missed payment, homeowners enter an early delinquency period—a critical phase that requires careful attention and proactive communication. During this time, late fees may accumulate, but lenders often provide a grace period before taking further action. This period serves as an opportunity for homeowners to engage with their lenders, discuss potential solutions, and, if possible, implement strategies to address the delinquency before it escalates further.

Step 3: Notice of Default (NOD)

The formal initiation of the foreclosure process comes with the issuance of a Notice of Default (NOD), 90 days after your first late payment. This legally binding document serves as an official notification to homeowners, clearly stating their delinquency status and the outstanding amount owed. As a pivotal point in the foreclosure journey, the NOD marks the beginning of a structured and regulated process that necessitates careful consideration and informed decision-making.

Step 4: Pre-Foreclosure Period

Following the issuance of the NOD, homeowners enter a pre-foreclosure period that allows for a more deliberate examination of potential remedies. This crucial phase is not just about acknowledging the problem; it's an opportunity to seek solutions actively. Homeowners may explore options such as catching up on missed payments, engaging in a short sale, or negotiating with the lender for alternative resolutions, including loan modification or restructuring.

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Step 5: Notice of Trustee Sale (NTS)

In the absence of a successful resolution during the 90-day pre-foreclosure stage, the lender issues a Notice of Trustee Sale (NTS), designating a specific date for a foreclosure auction. This formal notice serves as a clear indication to homeowners that the property is set to be auctioned. It's a crucial turning point that demands careful consideration of available options and a potential shift towards more decisive actions in response to the impending sale.

Step 6: Foreclosure Auction

The foreclosure auction is a pivotal event in the process, where the property is made available to the highest bidder 20 days after the NTS is filed. Whether conducted in a public setting on courthouse steps or through an online platform, this phase is characterized by competitive bidding, market forces, and the determination of the new property owner. The outcome of the auction significantly impacts the future trajectory of the property and its ownership.

Step 7: Real Estate Owned (REO)

In cases where the property does not find a buyer at auction, ownership reverts to the lender, resulting in the property becoming Real Estate Owned (REO). This transition signifies a change in the dynamics of property ownership, with the lender now taking on the role of property owner. The next steps may involve decisions regarding the property's listing, potential renovations, and overall management within the lender's real estate portfolio.

Step 8: Eviction

The final chapter in the foreclosure process may involve the need for eviction, particularly if the property's new owner, often the lender, requires vacant possession. This legal process entails removing occupants from the property, which may include the previous homeowners. Eviction represents the culmination of the foreclosure journey, finalizing the transition of property ownership and closing the chapter on a challenging period for all parties involved.

CALIFORNIA'S FORECLOSURE TIMELINE

In California, lenders commonly initiate foreclosures on deeds of trust or mortgages through a nonjudicial foreclosure procedure. The foreclosure process in California can extend for up to 200 days or more. The countdown starts on Day 1 when a payment is missed, indicating a delinquency on the loan. Official default occurs once the borrower falls 90 days behind, prompting the lender to file a notice of default. If the account remains delinquent after 180 days, the borrower typically receives a notice of trustee sale. Approximately 21 days later, the bank may proceed to auction the property at the courthouse.

DAY ONE

Late Payment

Day 1 starts when you miss your first payment to your lender.
DAY 90

Notice of Default (NOD)

Your lender files a Notice of Default with the court announcing how much you are behind. A process server will formally post a notice on your door.
DAY 180

Notice of Trustee Sale (NTS)

Once you’ve received a Notice of Default, you have 3 months in which to attempt to bring the entire past due amount current. Again, a notice will be posted on your door.
DAY 200

AUCTION DATE

Your home will be auctioned at the courthouse to the highest bidder.

Why Work with Me?

Navigating the intricate landscape of California's nonjudicial foreclosure process requires a seasoned professional by your side. As a dedicated real estate agent specializing in distressed properties, I offer a wealth of expertise to guide you through every stage. From the first missed payment to the courthouse auction, my commitment is unwavering. I bring a unique blend of experience and compassion, ensuring you receive tailored solutions and expert advice. Choose to work with me as a trusted partner in managing the complexities of distressed properties, turning challenges into opportunities for a brighter future.

Frequently Asked Questions

With so many different scenarios the "what ifs" can become very daunting. However, my team and I are here to help demystify the process and help you to get the most favorable result.

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