The Facts About Foreclosure

There have been 43 Agoura homes in foreclosure since February 1 of this year. "Since home equity or value has dropped so significantly, homeowners cannot refinance their loans and take advantage of the current low rates," said Leslie Appleton-Young, chief economist for the California Association of Realtors. 

Are you at risk?  Here are some of the most frequently asked questions about foreclosure with which you should be aware:

Q: What does it mean to be in foreclosure?

A: To foreclose is to deprive the mortgagor of the right to redeem mortgaged property when payments have not been made. When you have missed two month’s worth of payments, you have defaulted on your loan, but are not yet in foreclosure. The foreclosure proceedings will not initiate until the mortgage lender or bank submits paperwork to a prosecuting attorney.

Q: What are my options?

A: Once the mortgage lender sends letters informing you of the foreclosure, it is important that you keep your head up and find a way to fix things. Immediately, start considering your options of refinancing or loan modification.  On the other hand, if you know you are in over your head, then selling or short selling (in case you don't have equity left in the property) is always a wiser option option than foreclosure. To keep from falling deep into the foreclosure process, it is really important to weigh out your options, look at your finances, and see what you can afford in the future.

Q: Who do I turn to?

A: You can talk to your mortgage lender about your options with payment adjustments or with another loan. If you decide to sell the
house, there are always local investors who can help you get your feet back on the ground. If you decide to sell your home, make sure you are getting help from credible sources and don’t ever sign anything before reading it.

Q: If I am in foreclosure, how much time do I have until I have to leave the house?

A: Laws vary from state to state. In California, however, the house is not publicly advertised until the 110th day of the foreclosure process.  Once notice of default  is filed there are 90 days plus 20 days before the property is auctioned for sale at the court house.

Q: Does the lender have the right to repossess my house, even though I have been paying for it all this time?

A: Unfortunately, yes. Even though you only missed those few payments and had paid so many others, the mortgage documents or deed of trust give the lender the right to foreclose and repossess the property after you have defaulted on payments for a certain length of time.

Q: What is refinancing and how can it help me out of foreclosure?

A: By refinancing, you are essentially taking another loan. The new loan is based off of a new appraisal of your property. One benefit of refinancing is getting a lower interest rate and, in turn, decreasing your monthly mortgage rate. However, refinancing is not for everyone. It can also put you at higher risk for foreclosure depending on a number of factors. Do some research and talk to someone who can advise you well on this option. Remember, there are people who are willing to take the time and help.