Tax Foreclosure Properties In California
July 22nd, 2009
Tax Foreclosure Properties In California
Question: What are the consequences for a foreclosure in California?
I know I will have bad credit for 5-7 years, but what other penalties or issues can I face? My house value has gone so far down that I'd rather just save the mortgage and property tax money and just pay off my credit card debt and what not and start fresh.
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Answer: In California you have 120 days from the time the "Notice Of Default" is filed until the "Trustee Sale" takes place. You can legally live in the property that entire time and not pay any money. I'd suggest staying in the property and save as much of the house payment money so that you can rent a home at the end of the 120 days. Some foreclosing lenders will even offer a cash payment to the resident as an incentive to getting out without having to go through the eviction process after the foreclosure or even before. That eviction process can last 30-60 additional days after the Trustee Sale.
The owner of the property has 90 days after the Notice of Default is filed to make up (reinstate) all the back payments and legal/foreclosure fees. After that the lender can then demand the entire balance owned on the note to be paid in full in order to keep the property from being foreclosed on.
Point is, that the only real penalty that you face is the foreclosure itself and the resulting bad credit blemish. You will not owe a dime of taxes because of the Foreclosure Tax Relief Act of 2007 and the The Foreclosure Prevention Act of 2008 (S. 2636) .
If you have reasonably good credit, other than the foreclosure, very few property managers/landlords will hold that against you when you go looking for a new place to live. Fact is, I know that there is a good chance that these people will live in the property for a longer time than most because they won't be buying again for several years. I welcome these people as tenants. My average tenant stays in the property for at least 3 years.
Secret Foreclosures hidden in Tax Lien lists and tax sales
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