Foreclosure Attorneys in San Mateo, California
The coronavirus pandemic saw people scurrying to buy homes and relocate for a variety of reasons, but home sales are cooling now that the pandemic has resided and interest rates have risen. According to ATTOM Data Solutions, a curator of land and property data, home foreclosures rose 153 percent nationwide in the first half of 2022 from the year earlier.
In California, the increase was 115.7 percent, from 7,575 homes in the first half of 2021 to 16,340 in the first half of 2022. The ATTOM data includes default notices, bank repossessions, and scheduled auctions.
Foreclosure means that the homeowner or homeowners have fallen behind in their mortgage payments, and the lending institution is seeking to cover its financial commitment by taking the home back and selling it. There are federal and state laws that govern the process, and the owners of the home have ways to hold on to the property if they follow what’s legally available to them.
If you’re worried about a foreclosure or are already facing the prospect of your home being sold in or around San Mateo, California, contact the foreclosure attorneys at EH Law Group.
Your mortgage lender is required to offer you mitigation services, perhaps by lengthening the payback period or by lowering the interest rate, so you can stay in your residence, but you have to cooperate. There may also be a way to save your home through the bankruptcy process. Reach out immediately if you’re facing or involved in a foreclosure.
We also proudly serve clients in San Francisco, where we have a second office, and throughout the surrounding areas, including Santa Clara County, Oakland, Daly City, and South San Francisco.
Reasons for Foreclosure
Your lender expects to be paid for the mortgage they provided so you can purchase your home or for the second mortgage you obtained to use for other purposes. In other words, your home is collateral for any money loaned to you. If you fall behind in payments, then the agreement you have with the lender allows for foreclosure, the process of taking your residence from you and selling it to pay off what’s owed.
In many cases, the mortgage lender will not only bill you for the basic mortgage payment, but also (through an escrow account) will include your property taxes and property insurance in the total payment. However, if you yourself are separately responsible for either or both of the insurance and the taxes, if you fall behind in either, your lender can use that delinquency to commence the foreclosure process.
The Foreclosure Process
Foreclosures can be of two types – judicial and nonjudicial – but the vast majority are nonjudicial and are carried out according to the terms in your mortgage document. A judicial foreclosure requires the lender to go to court and file against you. If you don’t respond, then the lender can seek a default judgment against you, and if you do respond, then you will have to appear in court.
Most likely you will face a nonjudicial foreclosure, but foreclosures of either type are governed by both federal and state laws. Under federal law, the lender must provide you an opportunity for mitigation – or loan modification. Perhaps a lower interest rate or longer term can be negotiated, but either way, you will still be expected to make up any missed payments as well as late fees. These can be incorporated into the modification.
Federal loan-servicing laws require the lender to contact you by phone, or attempt to contact you, 36 days after a missed payment to discuss mitigation options, including loan modification, repayment, or forbearance. After 45 days, the lender must inform you in writing and assign someone to help you work out a way to avoid foreclosure.
Under most deeds of trust in California, the lender must also send you a notice of breach before moving ahead with the foreclosure or other action. Also, federal law requires the lender to wait – in most circumstances – 120 days before beginning the foreclosure process.
A notice of default begins the foreclosure process, and California law requires the lender to contact you by phone or in person 30 days before filing the notice of default. The notice of default has to be filed with the county recorder. Within 10 days, the lender must send you a copy of the notice of default, as well as copies to other interested parties, such as a holder of a junior mortgage.
Once you receive the notice, you have three months under the California Civil Code to cure the default. If you don’t, the lender can file a notice of sale and commence the foreclosure’s final step. California law states that the sale date must be at least 20 days after the notice of sale is recorded.
Will Bankruptcy Stop a Foreclosure?
Yes, when you file for bankruptcy, you receive what is called an automatic stay, which prevents creditors from trying to collect from you. However, on secured-debt obligations such as a home, the creditor can ask the court to proceed with the collection/foreclosure process, so you must move quickly.
If you file for a Chapter 13 reorganization plan, you can include your past-due mortgage obligations in your repayment plan. Chapter 13 is known as the wage-earner’s plan, and it takes your disposable income – what’s left after normal living expenses – to make monthly payments to creditors. When it comes to a home, you can use that process to pay for any arrearage on your mortgage, but going forward, you must also continue your monthly mortgage payments.
If you file for Chapter 7, the liquidation plan, your options are less limited. You will have to make up the arrearage or obtain a loan modification to remain in your residence. The advantage here is that, if you’re successful at a modification, the bankruptcy filing will be over in a matter of months, while Chapter 13 takes three to five years
Foreclosure Attorneys Serving San Mateo, California
While federal and state laws allow a month-long window to work things out with your mortgage lender, you want to make sure you cooperate along the way so they can’t accelerate the process. Contact us at EH Law Firm immediately when foreclosure looms or it’s already begun. We can help with your negotiations for loan modification or show you how to navigate the bankruptcy system to help preserve your home. Time is of the essence.