Foreclosure Law in California
In Chula Vista, California, foreclosure is a legal process through which an entity which has issued a mortgage takes possession and/or ownership of the property that secured the mortgage, because the person who took out the mortgage has consistently failed to make payments on it. The property in question is usually a house.
Foreclosure most often is a forced sale of a house at auction, since those are the most common types of property bought through a mortgage. Banks will usually try to get rid of the property as quickly as they can, selling it for as much money as they can get in a short period of time.
In every U.S. state, including California, a borrower has a right to a judicial sale of their foreclosed property. A judicial sale is simply an auction overseen by a court. The purpose of this is to make sure that the lender takes reasonable steps to sell the home for the highest possible price, and to ensure that the homeowner has an opportunity to bid on the house, if he or she is able. It is in everybody's interest for the bank to get the highest price possible for the house, even the borrower's. If the house fetches a higher price than what's left on the mortgage, the buyer can keep what's leftover. On the other hand, if it fetches less, the buyer might have to pay the deficiency.
In many states, mortgages fall into a category of loans known as "non-recourse loans." This means that, if the house is sold by the lender, the entire debt is eliminated, even if the sale price was less than the remaining balance on the loan. While the loss of one's home can be personally devastating, treating a mortgage as a non-recourse loan at least means that the homeowner will be more or less free to move on with their life once the property is foreclosed and sold.
How to Possibly Avoid Foreclosure in Chula Vista, California
First and foremost, you need to communicate with your lender, and not ignore the issue. Ignoring a problem with your mortgage will not make it go away, and can only make things worse. You should be honest with your lender, and stay in touch with them as much as possible.
Bear in mind that banks aren't in the business of real estate speculation - they're in the business of lending money, and making profits through interest on their loans. In short, the bank doesn't really want your house - they'd much rather have you continue making your mortgage payments. For banks, foreclosing on a home is a last resort. Basically, nobody likes foreclosures, and everyone wants to avoid them.
If your financial situation suddenly changes, your lender may be willing to change the terms of your loan, at least temporarily, allowing for lower monthly payments. If this means that they will be able to get some money from you, with default as the alternative, it can become an attractive option for everyone involved.
In California, some buyers have no choice but to resort to a short sale. This is simply the sale of the house, and using the funds to pay off the remainder of the mortgage. One advantage of a short sale is that, if the house sells for less than the mortgage balance, the remaining debt is discharged, and the borrower is free and clear.
Can a Chula Vista, California real estate attorney help?
If you are worried that your Chula Vista, California house is going to be foreclosed, and want to try and stop this, a good real estate lawyer can help.