Job changes, medical bills, a divorce, a rate that adjusted. There are a lot of reasons homeowners fall behind on payments, and it happens to good people every day. The most important thing we can tell you is this: don't wait. The earlier you look at your options, the more of them you have.
We're not attorneys or financial advisors, and this isn't legal advice. But here's a plain overview of how it usually works and where a sale fits in.
How foreclosure generally works in California
Most California home loans are secured by a deed of trust, which lets the lender foreclose without going to court. In broad strokes:
- Missed payments. After several missed payments, the lender usually starts the formal process.
- Notice of Default. A notice is recorded with the county saying the loan is in default.
- Notice of Trustee's Sale. If the default isn't resolved, a later notice sets a date for a public auction.
- The trustee sale. The house is sold at auction, and the owner loses it.
There are required waiting periods between these steps, and until the sale happens, you typically still own the house and can still sell it. An attorney can tell you exactly where you stand and what your deadlines are.
Options to look at
- Call your lender. Ask about a repayment plan, forbearance or a loan modification.
- Talk to a HUD-approved housing counselor. Their help is free, and they can explain your options and help you contact your lender.
- Talk to an attorney. A real estate or bankruptcy attorney can explain options like bankruptcy and how they would affect you.
- Sell the house. If you have equity, selling before the auction can pay off the loan and leave the rest with you.
- Short sale or deed in lieu. If you owe more than the house is worth, your lender may agree to one of these.
Why selling before the auction can make sense
If there's equity in the house, a foreclosure auction can eat into it, and a completed foreclosure generally does more damage to your credit than a sale. Selling first lets you pay off the loan and the past-due amounts through escrow, and keep what's left. The catch is timing. A traditional listing with showings and a buyer's loan approval can take longer than you have.
Watch out for foreclosure scams
People in foreclosure are a target for scams. Be careful with anyone who:
- Asks you to pay a fee up front to "save" your house
- Tells you to stop talking to your lender
- Asks you to sign your deed over to them as part of a rescue plan
- Pressures you to sign something today without time to read it
We never ask sellers to pay us anything up front, and a licensed, neutral escrow company handles all the money in our sales. You're always welcome to have an attorney review our paperwork.
How a quick sale to us works
Call us at (909) 833-4848 or start on our offer form. Tell us your sale date if one has been set. After we get your property details, we aim to send a written, no-obligation cash offer in about 24 hours. When title and the loan payoff are in order, we can close in about 7 days, or on your timeline. On qualifying homes, a cash advance of up to $30,000 before closing may be available to help with moving costs.*
We help homeowners across San Bernardino County, Riverside County, LA County and Orange County, including Fontana, Rialto and San Bernardino.
*Cash advance of up to $30,000 is available case by case, on qualifying homes and situations only, and is subject to our review of the property and title. Any advance is subtracted from your proceeds at closing. It’s money paid to you, never a fee: we never ask sellers to pay us anything up front.
This article is general information, not legal, tax or financial advice. Every situation is different, so talk to a real estate attorney, CPA or other qualified professional about yours.