What Laws Govern California Foreclosure
Here's the tricky part. If your mortgage lender's home base is located out of California, and you're on the verge of a foreclosure, the California Foreclosure laws may offer you a life preserver without you even knowing it. It's not common knowledge, unless you're an attorney, but the California Foreclosure law has two options that mortgage lenders must face and employ when seizing a home due to default. Judicial foreclosure or non-judicial foreclosure. These two options provide certain protection and rights for both the lender and homeowner that are little known, but often used.
Non-judicial is most commonly used when lenders do not reside in California. This option allows the lender(s) to seize a borrowers property without going through the entire California court system. They issue a Notice of Default, set a date and sell the home at auction. After the the non-judicial foreclosure, the first mortgage lender has no legal grounds to sue borrowers for any deficiency owed.
On the other hand, a lender using the California Foreclosure judicial option, and filing the proper paperwork with, and receiving court approvals, not only allows the lender to seize the home but legally pursue a deficiency against the borrower, as well.
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