Many people only know of one way to buy a house – with a bank loan. This usually means a large down payment and good credit. Most people have found that qualifying for a bank loan can be very difficult lately. This is because the banks have become stricter with their lending criteria.
If you are ready to buy the home of your dreams, but your credit or savings isn’t quite ready, a lease option may help you move in. When you lease a property with an option to purchase, you have the option to buy the property at the end of the lease term (typically 24 months). This allows you to control the home you want while taking the time you need to improve your credit and qualify for a good mortgage rate. It’s really quite simple, and if this is something you are interested in, contact us!
Mortgage Modification defined: A loan modification is a permanent restructuring of the mortgage where one or more of the terms of a borrower’s loan are changed to provide a more affordable payment. With a loan modification, the lender may agree to do one of more of the following to reduce your monthly payment: reduce the interest rate.
Are you eligible?
If you are having a tough time making your mortgage payments, you may be eligible for MHA’s Home Affordable Modification Program also know as “HAMP®.” HAMP is designed to provide deep and meaningful savings for homeowners devastated by unaffordable increases in expenses or reductions in income.
Do you meet the following criteria?
- Because of a financial hardship, you are struggling to make your mortgage payments.
- You are delinquent or in danger of falling behind on your mortgage.
- You obtained your mortgage on or before January 1, 2009.
- Your property has not been condemned.
- You owe up to $729,750 on your primary residence or one-to-four unit rental property (loan limits are higher for two- to four-unit properties).
- You have not been convicted within the last 10 years of a crime in connection with a mortgage or real estate transaction.
Who can I talk to?
Many mortgage companies participate in MHA Programs. If your mortgage is owned, insured, or guaranteed by Fannie Mae, Freddie Mac, Federal Housing Administration (FHA), Veterans Affairs, or U.S. Department of Agriculture (USDA), ask your mortgage company which solutions will work best for you.
Source: Making Home Affordable
It would seem that the housing market would be thriving. Prices have stabilized. Borrowing is cheap, even the job market is recovering. And yet home sales are not on the rise.
The problem is, credit. Buyers can’t qualify for a home loan. Back in the late 1990s and early 2000s the average FICO score to qualify for a home loan was in the mid-600s; now the average borrower has a credit score of about 740 – significantly higher and it’s more difficult to qualify.
If you’re a seller that has had difficulty selling your property, you may want to consider alternative methods. If you own your home free and clear, or have a small mortgage balance, you can offer your home with seller financing.
What are the benefits?
- It’s Quick – You can sell your home more quickly because there is no bank loan procedure. You skip the lending process, which significantly slows down the settlement process.
- Escrow Control – It won’t fall out of escrow because the buyer couldn’t qualify for the loan. You are the lender and you decide whom to sell it to.
- More Money – most of the time you can sell at full market value with seller financing. And, there are no realtor fees, which means more money in your pocket. Also, there are reduced closing costs when no lender is involved in the transaction.
- Tax Savings – taxes are owed only on the amount received each year rather than on the entire sale price.
U.S. Property specializes in buying properties with seller financing. Call us for more information at (800) 394-5709.
The fact is there’s no quick fix for creditworthiness. You can improve your credit report legitimately, but it takes time, a conscious effort, and sticking to a personal debt repayment plan. Don’t fall for the scams!
No one can legally remove accurate and timely negative information from a credit report. You can ask for an investigation —at no charge to you — of information in your file that you dispute as inaccurate or incomplete. Some people hire a company to investigate for them, but anything a credit repair company can do legally, you can do for yourself at little or no cost. By law:
You’re entitled to a free credit report if a company takes “adverse action” against you, like denying your application for credit, insurance, or employment. You have to ask for your report within 60 days of receiving notice of the action. The notice includes the name, address, and phone number of the consumer reporting company. You’re also entitled to one free report a year if you’re unemployed and plan to look for a job within 60 days; if you’re on welfare; or if your report is inaccurate because of fraud, including identity theft.
Each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — is required to provide you with a free copy of your credit report once every 12 months, if you ask for it. To order, visit annualcreditreport.com, or call 1-877-322-8228. You may order reports from each of the three credit reporting companies at the same time, or you can stagger your requests throughout the year.
It doesn’t cost anything to dispute mistakes or outdated items on your credit report. Both the credit reporting company and the information provider (the person, company, or organization that provides information about you to a credit reporting company) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights, contact both the credit reporting company and the information provider.
Step 1: Tell the credit reporting company, in writing, what information you think is inaccurate. Use our sample letter to help write your own. Include copies (NOT originals) of any documents that support your position. In addition to including your complete name and address, your letter should identify each item in your report that you dispute; state the facts and the reasons you dispute the information, and ask that it be removed or corrected. You may want to enclose a copy of your report, and circle the items in question. Send your letter by certified mail, “return receipt requested,” so you can document that the credit reporting company got it. Keep copies of your dispute letter and enclosures.
Credit reporting companies must investigate the items you question within 30 days — unless they consider your dispute frivolous. They also must forward all the relevant data you provide about the inaccuracy to the organization that provided the information. After the information provider gets notice of a dispute from the credit reporting company, it must investigate, review the relevant information, and report the results back to the credit reporting company. If the investigation reveals that the disputed information is inaccurate, the information provider has to notify the nationwide credit reporting companies so they can correct it in your file.
When the investigation is complete, the credit reporting company must give you the results in writing, too, and a free copy of your report if the dispute results in a change. If an item is changed or deleted, the credit reporting company cannot put the disputed information back in your file unless the information provider verifies that it’s accurate and complete. The credit reporting company also must send you written notice that includes the name, address, and phone number of the information provider. If you ask, the credit reporting company must send notices of any correction to anyone who got your report in the past six months. You also can ask that a corrected copy of your report be sent to anyone who got a copy during the past two years for employment purposes.
If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a statement of the dispute be included in your file and in future reports. You also can ask the credit reporting company to give your statement to anyone who got a copy of your report in the recent past. You’ll probably have to pay for this service.
Step 2: Tell the creditor or other information provider, in writing, that you dispute an item. Include copies (NOT originals) of documents that support your position. Many providers specify an address for disputes. If the provider reports the item to a consumer reporting company, it must include a notice of your dispute. And if the information is found to be inaccurate, the provider may not report it again.
Reporting Accurate Negative Information
When negative information in your report is accurate, only time can make it go away. A credit reporting company can report most accurate negative information for seven years and bankruptcy information for 10 years. Information about an unpaid judgment against you can be reported for seven years or until the statute of limitations runs out, whichever is longer. The seven-year reporting period starts from the date the event took place. There is no time limit on reporting information about criminal convictions; information reported in response to your application for a job that pays more than $75,000 a year; and information reported because you’ve applied for more than $150,000 worth of credit or life insurance.
The Credit Repair Organizations Act
The Credit Repair Organization Act (CROA) makes it illegal for credit repair companies to lie about what they can do for you, and to charge you before they’ve performed their services. The CROA is enforced by the Federal Trade Commission and requires credit repair companies to explain:
- your legal rights in a written contract that also details the services they’ll perform
- your three day right to cancel without any charge
- how long it will take to get results
- the total cost you will pay
- any guarantees
What if a credit repair company you hired doesn’t live up to its promises? You have some options. You can:
- sue them in federal court for your actual losses or for what you paid them, whichever is more
- seek punitive damages — money to punish the company for violating the law
- join other people in a class action lawsuit against the company, and if you win, the company has to pay your attorney’s fees
Report Credit Repair Fraud
State Attorneys General
Many states also have laws regulating credit repair companies. If you have a problem with a credit repair company, report it to your local consumer affairs office or to your state attorney general (AG).
Federal Trade Commission
You also can file a complaint with the Federal Trade Commission. Although the FTC can’t resolve individual credit disputes, it can take action against a company if there’s a pattern of possible law violations. File your complaint online at ftc.gov/complaint or call 1-877-FTC-HELP.
Where to Get Legitimate Help
Just because you have a poor credit history doesn’t mean you can’t get credit. Creditors set their own standards, and not all look at your credit history the same way. Some may look only at recent years to evaluate you for credit, and they may give you credit if your bill-paying history has improved. It may be worthwhile to contact creditors informally to discuss their credit standards.
If you’re not disciplined enough to create a budget and stick to it, to work out a repayment plan with your creditors, or to keep track of your mounting bills, you might consider contacting a credit counseling organization. Many are nonprofit and work with you to solve your financial problems. But remember that “nonprofit” status doesn’t guarantee free, affordable, or even legitimate services. In fact, some credit counseling organizations — even some that claim nonprofit status — may charge high fees or hide their fees by pressuring people to make “voluntary” contributions that only cause more debt.
Most credit counselors offer services through local offices, online, or on the phone. If possible, find an organization that offers in-person counseling. Many universities, military bases, credit unions, housing authorities, and branches of the U.S. Cooperative Extension Service operate nonprofit credit counseling programs. Your financial institution, local consumer protection agency, and friends and family also may be good sources of information and referrals.
If you’re thinking about filing for bankruptcy, be aware that bankruptcy laws require that you get credit counseling from a government-approved organization within six months before you file for bankruptcy relief. You can find a state-by-state list of government-approved organizations at www.usdoj.gov/ust, the website of the U.S. Trustee Program. That’s the organization within the U.S. Department of Justice that supervises bankruptcy cases and trustees. Be wary of credit counseling organizations that say they are government-approved, but don’t appear on the list of approved organizations.
Reputable credit counseling organizations can advise you on managing your money and debts, help you develop a budget, and offer free educational materials and workshops. Their counselors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. Counselors discuss your entire financial situation with you, and can help you develop a personalized plan to solve your money problems. An initial counseling session typically lasts an hour, with an offer of follow-up sessions.
Source: Federal Trade Commission
The Impact of Foreclosure and Short Sales on Your FICO Credit Score and the Time it Takes for Recovery2014-10-27 16:14:12
We Buy US Property, a subsidiary of Evolve One, provides you with alternative solutions when facing challenging times. Before you make the decision to default – take into consideration the following information and know that we will give you options.
As you can see, the impact on your credit score and the time it takes to recover from a short sale or foreclosure is significant. Call for a free consultation (800)394-5709.
FICO® scores help lenders make accurate, reliable and fast credit risk decisions across the customer lifecycle. The scores rank-order consumers by how likely they are to pay their credit obligations as agreed. As the most widely used broad-based risk scores, FICO scores play a critical role in billions of decisions each year. Originally released in the US, FICO scores are now deployed in 21 countries. FICO 8, the latest US version, increases predictive accuracy by up to 15%, especially for consumers who have recently sought new credit and those with prior credit blemishes.
ABOUT CREDIT SCORES
A credit score in the United States is a number representing the creditworthiness of a person, the likelihood that person will pay his or her debts.
Lenders, such as banks and credit card companies, use credit scores to evaluate the potential risk posed by lending money to consumers. Widespread use of credit scores has made credit more widely available and cheaper for consumers.
The best-known and most widely used credit score model in the United States, the FICO score is calculated statistically, with information from a consumer’s credit files. The letters stand for Fair Isaac Corporation.
It provides a snapshot of risk that banks and other institutions use to help make lending decisions. Applicants with higher FICO scores may be offered better interest rates on mortgages or automobile loans.
FICO SCORE RANGE
A FICO score is between 300 and 850, exhibiting a negative skewed distribution with 60% of between approximately 650 and 799. According to FICO the median score is 723.
Each individual actually has three credit scores for the FICO scoring model because the three national credit bureaus, Experian, Equifax and TransUnion, each has its own database. Data about an individual consumer can vary from bureau to bureau.
MAKEUP OF THE FICO SCORE
To the right is an approximate makeup of the FICO score used by U.S. lenders.
Credit scores are designed to measure the risk of default by taking into account various factors in a person’s financial history. Although the exact formulas for calculating credit scores are secret, FICO has disclosed the following components:
35%: Payment history—Late payments on bills, such as a mortgage, credit card or automobile loan, can cause a FICO score to drop. Bills paid on time will improve a FICO score.
30%: Credit utilization—The ratio of current revolving debt (such as credit card balances) to the total available revolving credit or credit limit. FICO scores can be improved by paying off debt and lowering the credit utilization ratio. Alternatively, applications for and receiving the credit limit increase will also drive down the utilization ratio. The closing of existing revolving accounts will typically adversely affect this ratio and therefore have a negative impact on a FICO score.
15%: Length of credit history—As a credit history ages it can have a positive impact on its FICO score.
10%: Types of credit used (installment, revolving, consumer finance, mortgage)—Consumers can benefit by having a history of managing different types of credit.
10%: Recent searches for credit—Credit inquiries, which occur when consumers are seeking new credit, can hurt scores. Individuals shopping for a mortgage or auto loan over a short period will likely not experience a decrease in their scores as a result of these types of inquiries, however. While all credit inquiries are recorded and displayed on credit reports for a period of time, credit inquiries that were made by the owner (self-check), by an employer (for employee verification) or by companies initiating pre-screened offers of credit or insurance do not have any impact on a credit score.
Getting a higher credit limit can help your credit score. The higher the credit limit on the credit card, the higher the utilization ratio average for all of your credit card accounts. The utilization ratio is the amount owed divided by the amount extended by the creditor and the higher it is the better your FICO rating, in general. So if you have one credit card with a used balance of $500 and a limit of $1,000 as well as another with a used balance of $700 and $2,000 limit the average ratio is 40 percent ($1,200 total used divided by $3,000 total limits). If the first credit card company raises the limit to $2,000 the ratio lowers to 30 percent, which could boost the FICO rating.
OTHER SPECIAL FACTORS:
Any money owed because of a court judgment, tax lien, etc. carry an additional negative penalty, especially when recent.
Having one or more newly opened consumer finance credit accounts may also be a negative.
FREE ANNUAL CREDIT REPORT
As a result of the FACT Act (Fair and Accurate Credit Transactions Act), each legal U.S. resident is entitled to a free copy of his or her credit report from each credit reporting agency once every twelve months. The law requires all three agencies to provide reports: Equifax, Experian, and TransUnion.
Sources: FICO; Suze Orman; Wikipedia
Sponsored by Evolve and Sell
Call for a free consultation (800)394-5709
We Buy US Property is a subsidiary of Evolve One and provides alternative solutions to foreclosures and short sales. For more information call us at (800) 394-5709, or CLICK HERE and apply.
We are not just about buying houses, we are about providing options and solutions when you need to sell your property quickly. We buy houses from people in situations just like yours in almost any area, condition or price range. We specialize in finding creative solutions to real estate problems that others won’t touch.
For tax year 2013, the standard deduction is $6,100 for single Americans and $12,200 for those married and filing jointly.
That means unless you can claim more than those amounts, there’s no reason to itemize.
One of the most common ways to get over the threshold, however, is to own a house and unlock the many deductions that come with homeownership.
But it’s not as simply as simply mailing a mortgage bill to the IRS and reaping the rewards. There are a bunch of very specific deductions that require specific paperwork.
Here are six important tax tips to look for if you’re a homeowner:
Claiming mortgage interest is the biggie, and one of the most common deductions among taxpayers.
“It’s evolved over the last 10 years, but we now have a cap of $1.1 million in mortgage debt that we can deduct for tax purposes,” said Monica Rebella, a certified public accountant in California. This includes first mortgages, as well as mortgages on second homes.
Rebella also points out that the deduction even covers multiple loans, so those with a primary residence in Ohio but winter home in Florida can claim the interest on both, so long as the total is under the $1.1 million cap.
Just be careful, she warns, of claiming a mortgage interest deduction on home equity loans that haven’t been used to improve the property.
“If you refinanced your loan and decided, ‘Hey, why don’t we take another $50,000 out in equity,’ but then you don’t use that money to, say, build a pool, that’s not fully deductible,” Rebella said. “You have to use the money to improve the house, or you are not allowed a deduction for that.”
Mortgage Insurance and Taxes Count, Too
In addition to mortgage interest, private mortgage insurance is also deductible.
Don’t mistake private mortgage insurance, or PMI, for homeowner’s insurance that protects against a fire or other loss. PMI comes into play with lower-income homeowners who often can’t afford a big down payment, and instead pay a small monthly fee as insurance against default . The idea is to protect the lender against being stuck with a big loan with zero equity in the home, as well as to allow those without huge nest eggs to buy a property with minimal down payments.
If you make a private mortgage insurance payment, in most cases this is deductible.
Also worth noting is that local and state property taxes can also be itemized on federal tax returns. Particularly for lower-income Americans, there may be special property tax benefits available based on your community.
Unless Congress extends existing tax credits for residential energy efficiency, 2013 is your last chance to claim up to $500 in green energy credits.
“Insulation, energy efficient windows and doors, high efficiency air conditioner and heaters — we still have credits for those,” Rebella said.
Still, the cap is small at just $500, and it’s not applicable if you claimed it previously since the credit was passed in 2011.
A separate and more substantial credit is available for solar energy installations, so long as they are on your primary residence and not a rental property.
“The credit is for 30% of the cost, including installation, including wiring, including everything,” Rebella said.
Cancellation of Debt
Cancellation of mortgage debt is a very important part of filing your tax return and shouldn’t be overlooked. That’s because if you fail to report the debt forgiveness, it could result in a big change to your overall tax liability and hefty penalties from the IRS.
Rebella said that while foreclosures are not as common as they were a few years ago, debt forgiveness is still very common.
“Interestingly, I’m seeing these 1099-Cs, which is the form for cancellation of debt, on people that can no longer make their second [mortgage] on their home,” she said.
In other words, some Americans who saw home prices rebound took out a home equity loan but are now having trouble making payments. Even if it’s not the same as a foreclosure or a short-sale, if that second mortgage is written down by a lender then the borrower has to report that when filing their taxes.
Selling Your Home Unlocks Tax Breaks
Of course, for homeowners who have taken advantage of a resurgent housing market by selling their homes altogether, there are also tax implications.
If you sold a home in the past year, costs including title insurance, advertising and real estate broker fees can also be claimed on your return.
You can also claim certain repairs to reduce your capital gains on the sale, presuming they were made within 90 days of the sale and clearly for the intent of marketing the property.
And after the sale? If you had to find a new home because of a new job that is located more than 50 miles away from your old home, you may be able to deduct your reasonable moving expenses, too.
Especially given the very harsh winter weather we’ve seen recently, it’s important to note that when disaster strikes you are able to claim a tax break for any significant losses.
“You have to have a loss more than 10% of your income,” Rebella said. “So if you make $50,000, you have to pay $5,000 out-of-pocket before you get any deduction.”
And for the record, that’s an out-of-pocket loss. You won’t get a deduction for losses that were covered by your insurer and that you were compensated for.
But Rebella notes that “some people don’t update their insurance, or sometimes there’s specific things [insurers] exclude so you can still have a casualty loss even with coverage.”
Just make sure that before you claim a $3,000 flat screen was stolen by a burglar or that you had a fully finished basement damaged in a flood that you can prove the value.
“The biggest thing is documentation, documentation, documentation,” Rebella said.
In this age of smartphones, it only takes a minute to snap a picture of valuable property — something good to have for both insurance claims as well as taxes, she said.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks.
California has nearly $2 billion in funds to help eligible homeowners keep their homes. Do you qualify?
Keep Your Home California Programs
Eighteen states, including California, have been designated as “hardest hit,” either because they are struggling with unemployment rates at or above the national average or steep home price declines since the housing market downturn. The Hardest Hit Fund® was provided by the federal government to provide targeted aid to families in these states.
On June 23, 2010, California received approval to develop unique foreclosure prevention proposals with Hardest Hit funding. California was ultimately awarded nearly $2 billion in funds to help eligible California homeowners avoid preventable foreclosures.
California’s programs, which are collectively called Keep Your Home California, were developed in collaboration with numerous community partners, foreclosure counselors, housing advocates and others directly involved in helping struggling homeowners.
Each of the Keep Your Home California programs is designed to address one or more aspects of the current housing crisis by doing the following:
- Helping low and moderate income homeowners retain their homes if they either have suffered a financial hardship such as unemployment, have experienced a change in household circumstance such as death, illness or disability, or are subject to a recent or upcoming increase in their monthly mortgage payment or are at risk of default because of an economic hardship coupled with a severe decline in their home’s value.
- Creating a simple, effective way to get federal funds to assist low and moderate income homeowners who meet one or all of the objective criteria described above. Speed of delivery will be balanced with fulfillment of the specific program’s mission and purpose.
- Creating programs that have an immediate, direct economic and social impact on low and moderate income homeowners and their neighborhoods.
No one has easy answers or immediate solutions to California’s housing crisis. U.S. Property specializes in finding creative solutions to real estate problems that others won’t touch.
If the stress of ownership is becoming a problem, let us provide relief. Call us for more information (800) 394-5709.
Source: Keep Your Home California
A quick look:
If you’re not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through the Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.
You may be eligible for HARP if you meet all of the following criteria:
*Eligibility criteria are for guidance only. Contact your mortgage servicer to see if you are eligible for HARP.
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
More information can be found by visiting Making Homes Affordable
A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. Fannie Mae’s program is called Short Sale/HAFA II.
A Short Sale is an alternative to foreclosure and may be an option if:
- You are ineligible to refinance or modify your mortgage
- You are facing a long-term hardship
- You are behind on your mortgage payments
- You owe more on your home than it’s worth
- You have not been able to sell your home at a price that covers what you still owe on your mortgage
- You can no longer afford your home and are ready or need to leave
What are the benefits of a Short Sale?
- Eliminate or reduce your mortgage debt
- Avoid the negative impact of foreclosure
- Start repairing your credit sooner than if you went through a foreclosure
May be able to get a Fannie Mae mortgage to purchase a home sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)
What is the process for a Short Sale?
If you qualify for this option, the process is similar to a normal real estate sales transaction. You will work with a real estate agent to market and sell your home. However, your mortgage company will also be working with you and your real estate agent every step of the way to:
- set the sale price (based on current market value),
- collect financial information and negotiate with other lien holders (i.e., your second mortgage company) if applicable,
- review acceptable offers,
- agree to the terms of the sale once a buyer is in place, and
- work with the buyer’s real estate agent and mortgage lender to finalize the sale.
In some cases, you may be eligible to receive relocation assistance to use toward your moving expenses and to make the transition to new housing easier.
A Short Sale may take up to 120 days, but this could be shorter or longer depending upon your specific situation. If you are unable to sell your home, you may be able to transfer the ownership of your property to the owner of your mortgage (also called a Mortgage Release or Deed-in-Lieu of Foreclosure).
Reposted from Fannie Mae: Know Your Options.
These are the main steps in a nonjudicial foreclosure, which apply to the majority of foreclosures in California.
- The lender MUST contact you and anyone else on the mortgage loan to assess your financial situation and explore your options to avoid foreclosure (called a “foreclosure avoidance assessment”). The lender:
- Cannot start the foreclosure process until at least 30 days after contacting you to make this assessment; and
- Must advise you during that first contact that you have the right to request another meeting about how to avoid foreclosure. That meeting must be scheduled to take place within 14 days.
- You can authorize a lawyer, HUD-certified housing counseling agency, or other advisor to talk on your behalf with the lender about ways to avoid foreclosure. You cannot be forced to accept any plan that your representative and the lender come up with during that discussion.
- If you and the lender have not worked out a plan to avoid foreclosure, the lender can record a Notice of Default in the county where your home is located, at least 30 days after contacting you for the foreclosure avoidance assessment. This marks the beginning of the formal and public foreclosure process. The lender sends you a copy of this notice by certified mail within 10 business days of recording it. You then have 90 days from the date that the Notice of Default is recorded to “cure” (fix, usually by paying what is owed) the default.
- WARNING: Since the Notice of Default is recorded as a public document, many fraudulent companies and scam artists search the public records to send defaulted borrowers offers to “help” them avoid losing their homes to foreclosure. These fraudulent companies could take your money and then do nothing to help. There are free services available from government and nonprofit organizations to help borrowers. Find help with a foreclosure in your county.
- If you do not pay what you owe, a Notice of Sale is recorded (at least 90 days after the Notice of Default is recorded). The Notice of Sale states that the trustee will sell your home at auction in 21 days.The Notice of Sale must:
- Be sent to you by certified mail.
- Be published weekly in a newspaper of general circulation in the county where your home is located for 3 consecutive weeks before the sale date.
- Be posted on your property, as well as in a public place, usually at your local courthouse.
- Have the date, time, and location of the foreclosure sale; the property address; the trustee’s name, address, and phone number; and a statement that the property will be sold at a public auction.
- At least 21days after the date when the Notice of Sale is recorded the property can be sold at a public auction. The successful bidder must pay the full amount of the bid immediately with cash or a cashier’s check. The successful bidder gets a trustee’s deed once the sale is complete. The lender usually bids at the auction, in the amount of the balance due plus the foreclosure costs. If no one else bids, your home goes to the lender.
Note: Before the foreclosure process begins, the lender or loan servicer may send you letters (over the course of several months) demanding payment. Those letters are NOT notices of default.
Reposted from the California Courts website.