Riverside County Bankruptcy Lawyer Blog
Foreclosures will slow down throughout Country with recent developments but not so fast for California homeowners.
While news of foreclosures slowing down based on banks and lawyers questionable methods is great news it won’t be helping Califonia homeowners as much as other states. California has non-judicial foreclosure which means that within a deed of trust there is typically a power of sale cause. After a notice of default, the owner of the property(bank) will typically sell the property at a trustee notice of sale which gives the borrower 21 days. At a trustee sale, the lender will typically bid the amount that is due plus costs if there is not a bidder. The borrower has no right of redemption and deficiency judgments maybe purused in non-judicial foreclosure. That essentially means that the lender can sue you for their loss on the property and you could get a 1099C for their loss which can sometimes have the effect of making you accountable for their loss as income for tax purposes in the following year.
The issue the banks are facing on judicial foreclosures are that people are signing afffadavits about documents that they are not familiar with and have not reviewed. The affadavits say certain facts about the case including what is owed which signer says he has personal knowledge of. They are doing this to the tune of 10,000 affadavits a month which they could clearly not have personally reviewed in order to get a summary judgment and avoid going to trial which is more expensive. They tried to streamline the machine of foreclosures and in the midst they perverted the justice system. The banks in their carelessness have shown. Foreclosure attorneys have been questioning the standing of MERS(mortgage Electronic recording system) for years and have had some success so this ruling by judges who have timely questioned banks foreclosure processes which will help homeowners. As a bankruptcy attorney it will likely not allow me to delay filing petitions so I can keep home owners in their homes longer because the trustee sales will go an as usual since lenders almost always foreclose outside of the judicial system. Many people who live in their homes for free while the bank drudges through the foreclosure process are able to put their financial houses back in order. For states with judicial foreclosure this will be a relief for homeowners who try to rebuild their savings and move on with their lives after falling off a cliff with the loss in equity that their homes went through.