Foreclosures Help Information

Posts Tagged ‘California Property’

Foreclosed Property California

Question: What happens in California when a property is sold at trustee sale?

If a first lien holder forecloses on a property and it is sold at trustee sale what happens if the sale amount is more than enough to cover the first lien and foreclosure costs? Will any junior liens be repaid?

For Example

1st lien - $200,000
2nd lien - $20,000
3rd lien - $22,000

Sale Price $300,000

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Answer: You ask a very good question.

In my experience in California, at trustee sales, any amount received over the amount of the lien that was foreclosed plus costs is given to the former owner owner of the property who lost the property in the foreclosure.

In your example the second and third lienholders lose their interest in the property, unless they have also foreclosed on the property.

In practice second an third lien holders record a request for notice of default. If the first is in default, the documents are usually written giving the second and third lienholders the right to foreclose as well even if the homeowner is current with the payments on their loans.

Also, virtually all mortage documents have provisions that call the loan due if the secured interest is sold. If there are any proceeds left over after the trustee's sale they would be used to pay all or part of any other liens on the property.

However, the trustee of the first loan may give any left over proceeds of the sale to the former owner of the property and the former owner may walk away with cash and not pay the second and third lienholders.

That is one of the many reasons that the second and third lien holders must be on their toes and that is also one of the reasons why second and third liens carry much higher interest rates than the first.

It does happen.

Foreclosed properties in Point Loma California

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Buying Foreclosed Property In California

Question: I have 2 homes and one is about to get foreclosed?

Hello, i currently live in California and the housing market is taking a huge dive, i cant make payments for both of my houses so im letting go of one the bank if about to foreclose it. My question will anything happen to my other property when the foreclosed property goes down? How hard will it be for me to buy another home in the Future?

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Answer: My question will anything happen to my other property when the foreclosed property goes down?

> No.

How hard will it be for me to buy another home in the Future?

> Very hard. You have proven to be financial irresponsible. A foreclosure is almost as bad as a bankrupt.

Buying Foreclosure Homes / REO in San Diego County