Foreclosure Law in California
In Gardena, 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 a large number of states, but not all of them, mortgages are a type of loan known as a "non-recourse loan." While the regulations governing these loans are complex, it most basically means that, once the house is sold, and the sale price doesn't cover what the borrower owes, the lender can't go after the borrower for the remainder. They simply have to take the loss.
How to Possibly Avoid Foreclosure in Gardena, 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.
You should be mindful of the fact that your bank wants you to make your monthly mortgage payments - they probably aren't scheming to trick you into giving up your home. This isn't out of altruism, it's due to the fact that foreclosure is almost never as lucrative for the bank in the long run than a mortgage that is paid in full over a period of years or decades, with interest accruing the whole time. For a bank, a foreclosure is simply a last resort to cut their losses.
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.
As a last resort, you might consider a "short sale," which results in loss of the home, but it usually leads to a great deal of the debt on the mortgage being forgiven. Essentially, a short sale in California involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Gardena, California real estate attorney help?
If you live in Gardena, California and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an experienced real estate lawyer probably will.