Judicial
Foreclosure
First, let us say that if you are
a homeowner in California this is most likely not the page you
need, because houses in California Rarely use this type of
foreclosure. This information is here only because it is
possible, though not probable that you my need to know this
and we would rather have information that most people don't
need out there, than not have something that someone could
need. The reason is that in California we use the term
Mortgage,when in fact most of us don't have, nor have we ever
had a mortgage. What we usually have is called a deed of
trust. You can learn more about the foreclosure process
called a trustee's sale by
clicking here.
So, if you are still reading this most
likely you are looking to educate yourself for the academics
of it or, maybe you are that one person in a million that
has been told you are facing a judicial foreclosure.
Either way the explanation that follows should help.
There are two reasons that a lender
may use the judicial foreclosure: 1) The lender executed a
mortgage and not a deed of trust in securing the loan against
the property. 2) The judicial foreclosure process allows
a lender to seek a deficiency judgement against the seller,
meaning that if the proceeds of the sale don't match the
amount needed to payoff the existing liens, they can seek a
judges order demanding payment for the difference.
There are a few reasons why they don't
use this process: 1) The process is very lengthy.
2) The process is expensive. 3) Most homeowners
faced with this situation will most likely resort to bankruptcy.
The process pretty much follows the
following steps, though not all of theses steps are always used.
- A lawyer or trustee will file a Lis
pendens against the property, notifying all that they intend
to seeks judgement of foreclosure.
- The lender will also file a
complaint at the same time stating what is owed and and why
they should be allowed to foreclose.
- The homeowner will be served notice
of this action with instruction on when and where to appear
for the proceedings.
- The homeowner has the opportunity
to be heard in court.
- If the debt is found to be valid,
the court issues a judgement for the total amount owed,
plus the costs incurred in the foreclosure process.
- A writ is issued authorizing a
Sheriff's sale. The sheriff's sale is an auction and
will require the high bidder to complete the sale with cash
or cashiers check, or a large deposit with the remaining
balance due in 30 days.
- At the end of the auction the court
will need to approve the high bidder and he becomes the
owner of the property.
- A sheriff's deed is prepared, delivered to the highest bidder, and recorded and at that point he high bidder owns the property.
To see the timeline for judicial
foreclosure
click here
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