TENANTS LEGAL CENTER
OF SAN DIEGO

Foreclosures

            

 

Foreclosures
(and evictions)

Tenants

Federal Program may offer compensation

 

HOMEUSEFUL LINKSNEWS / UPDATESABOUT  USCONTACT US

OWNERS


When facing impossible mortgage payments or when the home is worth less than the loan, letting it go to foreclosure seems like a good option, but is it?  How do you protect your rights?

INFORMATION AND PROGRAMS

NOTE: Due to the rapidly changing political and legal approach to foreclosures, any Federal or State program and their details may change or be set to expire or be extended. Therefore be sure to check that any program you seek assistance from is still in effect and is applicable to you and your situation.

Keep your Home California
Nationall Mortgage Settlement  (3/19/12)
California Resources for Homeowners (in the National Mortgage Settlement)
Avoid Foreclosure

Guide to avoiding foreclosure (HUD)
Home Affordable Refinance Program (HARP)
Help information (Freddie Mac)
Avoiding Foreclosure (The money alert)
Avoid, Prevent and Stop Foreclosure (RealtyTrac)
Stopping Foreclosures (About.com)

Reverse Mortgage information (FTC)

FEDERAL PROGRAM OFFERS ASSISTANCE AND POSSIBLE COMPENSATION

Certain Homeowners who were impacted by a foreclosure mat seek an  Independent Foreclosure Review by an independent consultant to identify eligible customers who may have been financially injured due to errors, misrepresentations, or other deficiencies in their foreclosure process. If the review finds that financial injury occurred, the customer may receive compensation or other remedy

REFINANCE YOUR LOAN BUT BEWARE OF UNETHICAL LENDING PRACTICES

Beware of unethical or fraudulent lenders.  These predatory lenders take advantage of people unfamiliar with loans and those put in crisis by impending foreclosures.   They claim to be able to save your home but many times they really are working to take it away from you.  Have any deal to save your home reviewed by an attorney or financial professional that you trust before you sign any loan modification or refinancing agreements. 

BEWARE OF BUSINESSES PROMISING LOAN MODIFICATION ASSISTANCE

Consumer Tips for Avoiding Mortgage Modification Scams and Foreclosure Rescue Scams
Loan Modification - An Alternative To Avoid Foreclosure 
Beware of Foreclosure Rescue Scams - There is free assistance through the Government programs.

Many homeowners have been taken in by such offices promising to help modify the loans facing default,.  They target desperate and frightened homeowners with promises to save the home with a new loan.  They charge hefty fees of $2,000.00  and much more.  The truth is that we have seen many homeowners coming to us for assistance with an eviction who have paid these fees and received nothing.  No new loan.  No loan modification.  Sometimes, no more communication with that office after the money is paid.  Be very careful before hiring such an office.  Try to work with eth lender yourself.  If they are not responsive, have a real estate, loan or legal professional simply call them for you.  Many times, that is all that is needed to get the process stated.  California has s STOP MORTGAGE FRAUD program to protect homeowners seeking loan assistance.

BANKRUPTCY

Bankruptcy may assist in limiting liability or debts.  For some people, Bankruptcy may be used to buy some time in the effort to save their home from foreclosure.  Strict Federal laws on the subject have made saving the home using this procedure more difficult than it used to be.  These laws are complex and subject to changes and modifications at any time,    Bankruptcy laws are complex and there are many considerations to review before taking this step.  You should absolutely seek the guidance of a competent bankruptcy attorney for advice before planning or taking any such action.

LOSING THE PROPERTY BY FORECLOSURE

IMPACT ON CREDIT

A foreclosure or short sale can have a negative impact on your credit for some time to come.

IMPACT ON TAX CONSEQUENCES

A foreclosure or short sale can have tax consequences due to a loan "forgiveness" being considered as taxable income.  The law varies in different States.  The Federal Government has addressed this issue in the past and continues to do so with proposed laws, amendments, extensions of prior laws, potential new laws etc.. Therefore, you are urged to seek the advice of a tax professional when making any decisions about any property loan.

DEFICIENCY JUDGMENTS

This is where the lender comes after the borrower in court after a foreclosure for the remaining balance owed on a loan. That is called a deficiency judgment.  Generally, in California, first money home loans are protected from this in nonjudicial foreclosures. Be advised that you may not be protected with refinancing that first loan, second mortgages and Home Equity Lines of Credit.  Lenders may try and use a judicial foreclosure to get a judgment.  The rules in other states vary.  The lender may also seek a deficiency balance owed after a short sale unless you get that debt released in writing.  You should seek the advice of a real estate professional before making and decisions regarding foreclosure or signing any sale agreements.

NOTE: We are not tax attorneys.  We cannot and do not give tax advice.  Any tax law or regulation referenced or examples given may or may not apply to you and that is why we urge you to seek the advice from a tax professional before making any financial tax related decisions or taking any actions which may have tax and/or financial implications.

TRUSTEE SALE

This is where a nonjudicial foreclosure auction sale occurs.  If your home makes it to a foreclosure (Trustee) sale, and you could not prevent it, then you should appear to witness what happens.  You will see who buys the home and for how much.  These are important pieces of information that will come in handy.

FIRST, you will know who to communicate with to try and work out any post foreclosure deal like a rent agreement or a buy back of the home.
SECOND, you will know how much, if any, of the debt was forgiven so you can prepare for any tax consequences of the sale.
THIRD, if there was any fraud committed against you, (i.e. the bank said they would delay the sale but did it anyway)  evidence can be gathered that may be used in a lawsuit you may file.

EVICTION

As a former owner, you are now living in the new owner's (i.e. the lender) home and they will not like that.  The new owner can begin an eviction action.  Also, they can ask for a daily rent to be paid (called "daily damages") for the holdover time.   Once such a notice is received, seek legal guidance right away.  The failure to act promptly, could lead to serious and speedy consequences.  Protect your rights.  Also, we do not recommend that you hire any "office" or "service" that solicits you by mail unless they are an established licensed attorney experienced in these matters.  The Tenants Legal Center does not solicit anyone by mail.

Home | Useful links | News and Updates | About UsContact Us

California law for San Diego is applied in these pages.  Such laws may or may not be applicable in other jurisdictions.  The information provided herein is of a general nature and is not intended to be taken as specific legal advice.  For legal advice in a particular situation,
promptly consult with an appropriate attorney.