You are to be congratulated for your courage and dedication to finding the best solution for your circumstances. We provide you with information about how to avoid foreclosure, explain the effects it can have on you and your family, and offer all the options. You decide on the course of action best for you. The idea of losing a home can be overwhelming, and I feel it is vital for you to have all the facts necessary to make an informed decision.

Option 1:  Reinstatement
Simply put it means paying all past-due installments of your loan and bringing the mortgage to a current status. This solution works best for homeowners who have substantial cash available to make up for their total past due balance, in addition to their regular mortgage payment. After being served with a Notice of Default, you have the right to fully reinstate your loan within 90 days.
Pros: Does not require the mortgage company or lender's approval.
Cons: Requires that a homeowner be able to pay all back payments, fines and fees.

Option 2: Forbearance or Repayment Plan
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.
Pros: Allows the homeowner to make back payments over time.
Cons: Requires that a homeowner be in a financial position to pay not only their current  mortgage, but also a portion of the back payments owed.

Option 3: Loan Modification
This is a situation where you want to stay in your property, but can’t afford your current payment(s). The lender might renegotiate interest rates or reduce your payment and add it on to the backend of your loan.
Pros: Reduces the payment a homeowner is required to make on a monthly basis.
Cons: Requires that a homeowner 'qualify' for the new payment and will often require full documentation.

Option 4: Rent
You can rent your property out until the market turns upwards.
Pros: Allows homeowner to keep property.
Cons: Rent often does not cover the full cost of property ownership and maintenance.

Option 5: Deed in Lieu of Foreclosure
Another option is to simply move and give the home back to the bank. This is typically done through what is known as a “Deed in Lieu of Foreclosure”. Basically, you are giving all of your interest in the property to the lender in order to satisfy the debt.
Pros: The lender will forego their right to a deficiency judgment.
Cons: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.

Option 6: Bankruptcy
If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.
Pros: Does not require lender approval.
Cons: Bankruptcy can be costly, is damaging to credit scores, and can only be declared once every seven years.

Option 7: Short Sale
A short sale is where we will sell your home for less than what you owe. We need to negotiate with your lender(s) to accept less than what you owe. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
Pros: Click here
Cons: Click here


Disclaimer: The information provided on website is not engaged in the practice of law nor gives legal advice. It is strongly recommended that you seek appropriate professional counsel regarding your rights as a homeowner.

California Homeowner Bill of Rights to Take Effect on January 1, 2013
The California Homeowner Bill of Rights takes effect on January 1, 2013 to ensure fair lending and borrowing practices for California homeowners.

The laws are designed to guarantee basic fairness and transparency for homeowners in the foreclosure process. Key provisions include:

• Restriction on dual track foreclosure: Mortgage servicers are restricted from advancing the foreclosure process if the homeowner is working on securing a loan modification. When a homeowner completes an application for a loan modification, the foreclosure process is essentially paused until the complete application has been fully reviewed.
• Guaranteed single point of contact: Homeowners are guaranteed a single point of contact as they navigate the system and try to keep their homes – a person or team at the bank who knows the facts of their case, has their paperwork and can get them a decision about their application for a loan modification.
• Verification of documents: Lenders that record and file multiple unverified documents will be subject to a civil penalty of up to $7,500 per loan in an action brought by a civil prosecutor. Lenders who are in violation are also subject to enforcement by licensing agencies, including the Department of Corporations, the Department of Real Estate and the Department of Financial Institutions.
• Enforceability: Borrowers will have authority to seek redress of “material” violations of the new foreclosure process protections. Injunctive relief will be available prior to a foreclosure sale and recovery of damages will be available following a sale.(AB 278, SB 900)
• Tenant rights: Purchasers of foreclosed homes are required to give tenants at least 90 days before starting eviction proceedings. If the tenant has a fixed-term lease entered into before transfer of title at the foreclosure sale, the owner must honor the lease unless the owner can prove that exceptions intended to prevent fraudulent leases apply.(AB 2610)
• Tools to prosecute mortgage fraud: The statute of limitations to prosecute mortgage-related crimes is extended from one to three years, allowing the Attorney General’s office to investigate and prosecute complex mortgage fraud crimes. In addition, the Attorney General’s office can use a statewide grand jury to investigate and indict the perpetrators of financial crimes involving victims in multiple counties.
  (AB 1950, SB 1474)
• Tools to curb blight: Local governments and receivers have additional tools to fight blight caused by multiple vacant homes in their neighborhoods, from more time to allow homeowners to remedy code violations to a means to compel the owners of foreclosed property to pay for upkeep.
  (AB 2314)
The California Homeowner Bill of Rights marked the third step in Attorney General Harris’ response to the state’s foreclosure and mortgage crisis. The Mortgage Fraud Strike Force was created in May 2011 to investigate and prosecute misconduct at all stages of the mortgage process. In February 2012, Attorney General Harris secured a commitment from the nation’s five largest banks for up to $18 billion for California borrowers.