Generally • Eviction • Whose Contacting Me? • Legal Implications • MFDRA

NOD Notice of Sale Trustee Sale Short Sale?

Understand the timeline & options

What should I be most concerned about?
There are two fundamental questions you must ask including:

LEGAL LIABILITY	Can you be sued for a 'deficiency judgment' - that is, the difference between what is owed on the loan/s and available sales proceeds?
	If so, for how much and by which lender? If not, why not - that is, is there something in California law that allows you to escape legal liability and recourse? Is your loan indebtedness 'purchase money' or 'refinance'?
TAX LIABILITY	Is your default on the mortgage and any cancellation of debt by the lender (via short sale, deed in lieu, or foreclosure) a taxable event?
	If so, how is it calculated? If so, are you exempt from pay the tax? What is your 'acquisition indebtedness'? Did you make capital improvements to the property?

How can you help me? READ HERE

Only a qualified real estate attorney can provide you with the depth of analysis required to define your situation. I help clients ...

• regain confidence and control
• make informed decisions
• negotiate with lenders from a position of power
• minimize recognition of ordinary income from debt relief (COD)
• strategize the best possible result
• implement lasting solutions
• interact most effectively with sellers, agents & buyers - call for details!
• negotiate short sales with lenders
• connect clients with needed specialists (Realtors, CPA, etc.)

My written report provides my clients with:

• an explanation of every option available,
• an explanation of why some options work and others don't,
• a numeric analysis that demonstrates the impacts, and
• strategies to make meaningful decisions.

Can I afford to hire you? How do I engage your services?
The significance and impact of defaulting on a loan cannot be overstated. I treat your concerns with the utmost respect, seriousness and confidentiality. I gather key documentation, promptly and thoroughly review it andreport back comprehensively about ALL of your options.

You can hire me with a simple agreement sample here

I charge an initial affordable fee (payable by cash, check, or credit card) that compensates me for the time necessary to get up to speed on your particular loan situation so that my findings are focused on you and your particular situation.

Thereafter, IF you choose to keep me involved in the process, whether to negotiate with the lender, the fee I charge is on either an hourly or contingent basis (part of the commission paid by the lender in an approved short sale) and in some cases, where approved by the lender, a foreclosure consultant fee.

Whatever you do, get your situation fully analyzed by a qualified professional who can provide legal advice. Choosing to do nothing, failing to strategize, could be financially devastating.

I am immediately ready, able, and willing to assist.

---

What are my options?
Your options vary depending on your particular circumstances. Generally speaking, the options include see MATRIX :

• curing by paying back due / missed mortgage payments,
• loan term modifications,
• refinance,
• repayment programs,
• forbearance,
• short sale,
• deed in lieu of foreclosure,
• temporary restraining order,
• bankruptcy and
• foreclosure.

Each option is impacted significantly by the homeowner's / borrower's loan documentation and the commitments made to the lender(s).

How will I know which is the best option for me?
This is a tremendously complicated question. The answer will depend upon your assets, liabilities, income, expenses and the underlying reason why the house is in foreclosure. The best solution will also depend upon the type of mortgage you have and where in theforeclosure process you are when you make the decision to save the house.

Contact me to assess your particular situation.
It is in your best interest to Act NOW.
Time is working against you.
With my analysis, you will make a more informed decision about how to proceed.

Am I a candidate for a 'short sale'?
Perhaps and perhaps not. A Short Sale situation arises where more money is owed the secured lenders than the property is worth. Although many real estate licensees jump to the belief that every property is a short sale candidate, that is simply NOT the case.

The ‘short sale’ option allows you to sell your property and pay off your mortgage loans to avoid foreclosure which is the most damaging to your credit rating. However, a short sale is 1/ not a way to escape a contractual obligation and 2/ not available to borrowers who can afford the mortgage and other property payments.

I carefully analyze key documentation to assess whether you are a short sale candidate, but I also explore your other options so that you can make an informed decision about what is in your best interests and financial capabilities.

You can engage my services - Agreement sample here
I conduct a comprehensive review based on key documentation. Once completed, we are able to intelligently discuss your options with an eye on the calendar so that you have an idea of how the decisions you make may affect future ones.

---

What is a foreclosure?
When a secured creditor, usually a bank, attempts to recover monies owed to them based on a promissory note by selling the collateral. In more simple terms you have probably borrowed money from a bank or mortgage company in order to purchase or refinance a home. In exchange for lending you the money, you made a promise that if you could not pay them back they could take the house.

Can you explain some of these steps?
In California it works like this. (If you are already in the foreclosure process you would be well advised to consult with an attorney to help you define your rights and obligations.)

Pre-Foreclosure

• Homeowner misses one or more mortgage payment(s).
• Late notice send by bank.
• Homeowner misses additional payments.
• Bank attempts in writing and by phone to contact borrower and resolve situation.
• No arrangements are agreed upon and borrower continues to miss payments.
• Bank issues demand for payment under the note in full, based on the acceleration clause. Most mortgage notes contain language which basically says if you fail to pay the bank under the terms of the note with monthly payments as promised they can accelerate the note, meaning that the full amount is due on demand. For example if your mortgage is $100,000 with payments of $1000 per month you are only required to pay $1000 per month unless you miss these payments and the bank subsequently demands the balance based on this acceleration. Once this happens you legally owe the full balance of $100,000 plus back interest, plus late charges, plus legal fees all at once. You will find from this stage on the bank will not accept monthly payments. They will instead demand much more to reinstate the loan. Although I consider this step in the preforeclosure category, once demand has been made and the note has been accelerated you should already have contacted an attorney who is an expert in dealing with these matters.
• No payments or arrangements acceptable to the bank are made.
• OVERVIEW
• Notice of Default is recorded. See here.
• No payment or settlement arrangements are made with the lender.
• Notice of Trustee Sale. See here.
• Notice and waiting periods expire.
• Trustee's Sale. See here. House sold at auction to highest bidder.

How long does this process usually take?
From the time you miss your first payment to the final foreclosure sale its not uncommon for six months or more to pass. It will also depend a great deal on your mortgage holder and how aggressively they pursue your case.

Can the bank just come and kick me out of my house?
No. Only an order of the court can force you to leave your home. Ultimately you may be evicted but there are procedures within the court system that the mortgage holder must follow first for the foreclosure and then another set for the eviction.

When in the foreclosure process do I have to move out of my house?
YOU DON'T! The foreclosure process even when followed through to completion only transfers ownership of the house from you to the high bidder. This transfer of ownership becomes complete at a closing following the foreclosure auction. After the auction you automatically become a tenant in the house you formally owned. At this point the new owner must follow the legal procedures in California for eviction.

What is the eviction process?
It is similar to traditional unlawful detainer proceedings with some twists. You should consult an attorney with expertise in this field if your case has gone this far.

How long does the eviction process take?
From the day you are given you notice until a sheriff might pack up and move your possessions out of your house you can expect a 6 week to 6 month time frame, with the average about 10 weeks.

Once the foreclosure process starts is there anything I can do to stop or slow it?
Yes. If working from your first late payment there are several ways to resolve the situation most relating to quality & timely communication and disclosure. The longer you wait, however, the more some of these options will become unavailable.

At what point will I have absolutely no options left?
Never. You have not lost until you have decided the fight is over. Even after a foreclosure, even after an eviction you may have a right to buy your house back in the open market as anyone else. Realistically if you have not been able to save the house before a sheriff evicts you, chances are strong you will never be able to structure a deal to buy the house back. This is largely based on the assumption that you hired a capable attorney and had the ability to strike a deal. If so, you would have done so long before a sheriff removed you from the house.

I am receiving a lot of mail from people that claim they can help me where are they getting my address?
Because of the legal nature of the foreclosure process your name and address may be part of public information offered through the court system and ultimately published in certain journals and publications.

What kind of people send these letters and can they really help me?
Many groups of people try to contact homeowners in foreclosures. Not every individual trying to talk with you are acting in your best interest. If it doesn't 'feel right' or you don't trust the person talking to you, steer clear!

• Mortgage Brokers. If there is enough equity in your home they can help you to refinance and stop the foreclosure by paying off your current mortgage in full. This solution often works well, but you must be careful because the interest rate and closing costs on these types of loans can be high. Due to your credit situation you will pay much more than at a bank, but some brokers may try to charge even more points or interest then another just to gouge the debtor for more fees if they think they can get it. Keep your eyes open and a foreclosure prevention loan can save the day.
• Chapter 13 Attorneys. If you have the financial ability to complete the chapter 13 plan and this also a valid way to save the house, just beware that many of these attorneys will be more than happy to file a chapter 13 for you whether it is the best option or not. It is my personal feeling that this should be an option of last resort unless your personal circumstances dictate this as the best solution for you. Keep away from lawyers running "bankruptcy mills" as I call them. These firms may offer low fees but will let paralegals handle your entire case, never really getting to know your situation or giving you the personal attention you need.
• Mortgage Negotiators. Some people hold themselves out as professionals who can save you from foreclosure, other than those who fall into the crooks category below, some can be quite skilled at negotiating "repayment plans". Homeowners can arrange these plans with the banks themselves in easy cases. These professional foreclosure negotiators can help in cases where the people seem to be failing at getting a "repayment plan" done with the bank on their own or where the bank's terms seem too demanding. Often more favorable terms can be reached by a professional.
• Private Financiers. Two very distinct groups fall into this category. The most useful for people wanting to save their home from foreclosure will be private mortgage financiers who will help arrange a new home loan, even when they have been turned down by other high risk lenders. Other investors will want to buy the house from you. Keep a sharp eye on what they are doing for you and what they want for themselves. Sometimes these people can help save your home, other times they don't care about anyone else and depending on how they set things up they can make your situation even worse. Remember there are many ways to save a house from foreclosure. You do not need to sell your house unless you do not want to live there anymore or you can not afford the payments even if you got a new mortgage or could catch up on the old mortgage.
• Your Mortgage Holder. Especially those involved with government backed mortgages will offer ways for you to reinstate your existing mortgage. While I have seen some of these letters which can be down right misleading compared to what the banks will realistically do, reinstating an existing mortgage is a viable option and in many cases the best option.
• Investor Types. There are many investors and real estate agents offering to save your property with one scheme or another. These scheme almost always waste your time and money. Also, the investors and real estate agents have nothing to lose by pretending to be your savior. Steer clear!

In California, what is the basis of a lender's right to foreclose?
LITIGATION BASED ON DEBT RELIEF:
In the event of a default, the loans originated in California afford lenders the power to conduct a private power of sale through a nonjudicial foreclosure.

Provided the deed of trust includes appropriate enabling language, upon the borrower's default, the beneficiary can compel the trustee to conduct a private power of sale foreclosure. [Garfinkle v. Super.Ct. (Wells Fargo Bank) (1978) 21 C3d 268, 277, 146 CR 208, 214 - trustee's power to sell upon default “is a right authorized solely by the contract between the lender and the trustor as embodied in the deed of trust”; Bank of America, N.A. v. La Jolla Group II (2005) 129 CA4th 706, 712, 28 CR3d 825, 828 - power of sale in trust deed is “creature of contract” that exists only if expressly granted by trustor in security documents].

Constitutionality: This kind of foreclosure sale does not involve any court proceeding nor any judicial supervision whatsoever. Although it is subject to statutes restricting and regulating exercise of the power of sale, a nonjudicial foreclosure remedy is a right authorized solely by contract between the lender and trustor (embodied in the deed of trust) and thus is exempt from procedural due process challenge under the federal and state constitutions. [Garfinkle v. Super.Ct. (Wells Fargo Bank), supra, 21 C3d at 272, 281–282, 146 CR at 210–211, 217—nonjudicial foreclosure involves private (not state) action authorized by contract and thus is immune from 14th Amendment and state constitutional procedural due process requirements.

Pros and cons from lender's perspective:
Advantages. Nonjudicial foreclosure offers the following advantages for lenders:

1. Nonadversarial, time-saving / cost-saving – a properly-conducted trustee's sale does not require judicial oversight and constitutes a final adjudication of the borrower's and lender's rights. [Dreyfuss v. Union Bank of Calif. (2000) 24 C4th 400, 411, 101 CR2d 29, 37; Nguyen v. Calhoun (2003) 105 CA4th 428, 440–441, 129 CR2d 436, 446–447.
2. Because judicial proceedings are not involved, a trustee's sale is relatively fast, inexpensive and not per se adversarial. Indeed, there is minimal (if any) need for legal counsel [See Alliance Mortgage Co. v. Rothwell (1995) 10 C4th 1226, 1236, 44 CR2d 352, 358].

Disadvantages: Two considerations may make judicial foreclosure a more desirable remedy:

1. Deficiency judgment forfeited – by electing to pursue a trustee's sale, the lender loses the right to recover any “deficiency” judgment against the borrower - i.e., if the property has declined in value and thus is worth less than the secured debt at the time of foreclosure, the lender forfeits any claim against the borrower for the difference (deficiency). [CCP § 580d; Alliance Mortgage Co. v. Rothwell, supra, 10 C4th at 1236, 44 CR2d at 358; see Florio v. Lau (1998) 68 CA4th 637, 644–645, 80 CR2d 409, 413–414].
2. Compare—sold-out junior lienholders: Section 580d does not bar junior lienholders from suing the obligor directly after the security is extinguished by nonjudicial foreclosure of the senior lien. [See Bank of America Nat'l Trust & Sav. Ass'n v. Graves (1996) 51 CA4th 607, 611–613, 59 CR2d 288, 290–292; but see also Simon v. Super.Ct. (Bank of America, NT & SA) (1992) 4 CA4th 63, 77–78, 5 CR2d 428, 437–438—not applicable where same lender holds both senior and junior liens on same property.

How will I know which is the best option for me?
This is a tremendously complicated question. The answer will depend upon your assets, liabilities, income, expenses and the underlying reason why the house is in foreclosure. The best solution will also depend upon the type of mortgage you have and where in the foreclosure process you are when you make important decisions about the house.

CONTACT ME to assess your particular situation.
It is not in your best interest to wait.
Time is working against you.
Act NOW - CALL FOR A FREE CONSULTATION

Paul E. Stansen, A Professional Law Corporation.
Mailing Address: 25600 Agoura Road # 545, Calabasas, California 91302
© 1993-2008 | All rights reserved.