What is a foreclosure? Foreclosure is the legal process undertaken by a lender to recover the balance of a mortgage loan when the homeowner stops making payments. Since the home is security for the loan, the lender will force the sale of it to satisfy the debt.
In other words, if you, a homeowner, stop making payments on your loan, the mortgage holder, or lender, can repossess your property. But there are steps that a lender must take to repossess your property in California.
The first step a lender must take is to file a Notice of Default (NOD) with the county recorder. The lender has 10 business days after filing to mail the NOD to the homeowner. The property owner is given a certain amount of time to respond to the Notice of Default by paying the default amount. This time period is known as the pre-foreclosure period.
If the homeowner does not respond to the Notice of Default within three months by paying off the default, the mortgagee or lender will then file a Notice of Trustee Sale setting the date for a public auction. The Notice of Trustee Sale is also served to the homeowner.
When the date for the public auction approaches the sale may be cancelled for several reasons. A homeowner may pay off the arrears amount. The homeowner may have successfully completed a loan modification or short sale. There may have been a filing error. The homeowner?s right to reinstate the loan expires five days before the auction date.
If the auction takes place, the lender will place an opening bid. If an investor or other third party bids over the lender bid, the property will be sold to the investor or third party.
If there are no investor or third party bids on the property, which is commonly the case, the property will become part of the lender?s REO (real estate owned) inventory.
There are two types of foreclosure according to California foreclosure laws.
Non-Judicial Foreclosure is the most common type of foreclosure in California. There is no court trial required with non-judicial foreclosure proceedings. There is an expedited time frame for the foreclosure proceeding. There is no deficiency judgment against the homeowner, meaning that the mortgagee or lender can?t collect the difference between the amount owed and the amount received when sold at auction.
However, homeowners association liens extend 90 days beyond the foreclosure sale.
Judicial Foreclosures are very rare in California. They require court proceedings, have no expedited time frame, and carry with them the ability of the lender to collect a deficiency judgment against the homeowner.
Alameda County currently has 9,388 homes in foreclosure with an average sales price of $288,461, according to RealtyTrac.
Foreclosure Radar?s May 2012 foreclosure statistics show that the number of Notices of Default in Alameda County decreased about 10 percent from May 2011. The Notices of Trustee Sales also decreased from May 2011 by 41 percent.
Foreclosure inventory in Alameda County decreased about 28.20 percent from May of 2011. Pre-foreclosures also decreased from May 2011 by 19 percent.
In Alameda County, lenders are taking longer to resell their properties while investors resell their investment property at the same rate as May 2011.? These are the flippers who make repairs on the foreclosed property and then resell them as quickly as possible.
Cities in Alameda County with new foreclosures in the triple digits in June 2012 included Oakland with 431 new foreclosures, Hayward with 191, Fremont with 114 and San Leandro with 102 new foreclosures.
Other Alameda County cities with new foreclosures included Union City with 54, Berkeley with 53, Alameda with 48, Pleasanton with 47 and Dublin with 45.
Based on the data from Foreclosure Radar, foreclosure filings are trending down. The number of properties sold to investor third parties nearly equals the properties that reverted back to the bank to become REO inventory.
The Foreclosure Radar data indicates that investors are contributing in a big way to the market. They are buying and flipping foreclosed properties as quickly as they can. When inventors put their flipped homes on the market, they are greatly increasing the meager inventory many of Alameda County cities are experiencing. Investors are showing that they have confidence in the real estate market, and that is a good for everyone.
Written by Evelyn Kennedy
Source: http://www.realestate.com/advice/what-to-know-about-foreclosures-in-alameda-county-40402
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