What Options Are Available to Borrowers Who Are in Danger of Non-Judicial Foreclosure?
If you are like many homeowners facing non-judicial foreclosure, you may be wondering what the difference is between this type of foreclosure and judicial foreclosure. After all, they are both forms of selling your home. However, there are some significant differences in the process and outcomes of each type of foreclosure. Knowing the difference can help you in choosing which option is best for you and your specific situation.
A judicial foreclosure happens when a court orders a lender to sell and seize the property used as security for a loan. The word is most commonly associated with residential real estate, but it can also apply to mobile homes and other stuff that are used as collateral. Once the lender obtains possession of the property, it will usually have to turn over the deed to the borrower. The borrower can then get a new mortgage from a different lender or refinance the current mortgage at a lower rate.
In a nonjudicial foreclosure, the lender simply seizes control of the property without going through a legal proceeding with a judge. The only thing the borrower can do is challenge the foreclosure in court, but if the lender fails to prove its ownership, the courts have no power to rule on the issue. As long as the lender has met all the conditions necessary to take control of the property, a judge will typically dismiss the case.
In most states, once a lender seizes control of a property, it can sell the house to the public at any time. Homeowners who are behind on their mortgage are not entitled to be involved in the sale. Even if the borrowers do have the right to purchase the house, the bank has complete control over the process. Most lenders prefer to sell homes because they believe it takes less time and expense for them.
But, the process of foreclosure leaves homeowners feeling helpless. They cannot stop the sheriff sale and can only make minimal contact with the bank. Without a lawyer, it becomes impossible to know the foreclosure’s progress or get an update on the lender's progress. Many homeowners are left wondering what they can do to stop foreclosure and keep their homes with no one to represent them.
There are two main options for borrowers facing nonjudicial foreclosure. They can attempt to save their home by either selling it themselves or hiring an attorney. With so many ads on television, hundreds of auctions across the country, and free counselors offered by each bank, it may seem easy to do nothing. But while many borrowers feel hopeless, others have found the help they need to save their homes.
For example, local solutions are available for borrowers in the Los Angeles area who are in danger of foreclosure. Local solutions are often provided at no cost and often include contacting the lender or assisting the borrower with a short sale. In some cases, a local real estate agent may even be able to prevent the sheriff sale altogether, thus allowing borrowers to save their homes.
Another option for borrowers is filing a "cease" order with the court that gave the lender the right to take the home through foreclosure. Such charges often last only a few days and are effective immediately. However, many banks will not honor them since they are considered a temporary fix to the foreclosure problem. In this case, homeowners must file an appeal with the court that issued the original order, which a judge must then approve. If it is denied, borrowers can again try to get the court to reinstate the foreclosure. However, if they are successful, the homeowners may keep their home until the next court hearing, at which point the decision will be final.
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