Frequently Asked Questions -

In the state of California, a foreclosure can be completed in less than six months from the time of loan delinquency. The mortgage company can record a Notice of Default, the first step in the foreclosure process, as soon as the loan is two months delinquent. Typically, the first indication a homeowner gets that a foreclosure has commenced is notification of the Notice of Default.

Once the Notice of Default has been recorded, the foreclosure can be completed in less than four months.

There are several things you can do to avoid foreclosure. You should let your lender know right away that you intend to solve the problem so they won't have to get the property in foreclosure.

The following are a few of your options:

• Sell Your Property
• Refinance
• Negotiate a Forbearance Agreement
• Do Nothing

For your lender to be able to recover losses incurred on your mortgage as a result of foreclosure, they would need to do a Judicial foreclosure. While they could pursue a deficiency judgment through a Judicial Foreclosure on some mortgages, it almost never happens in California.

The lender is usually left with the proceeds generated at the Trustee's Sale or from a sale after acquiring the property at the Trustee's Sale. This is another reason why lenders would prefer to work with the homeowner to solve the problem and avoid getting the property through foreclosure.

Deeding your property to a third party does not eliminate your obligations related to the loan. Unless the mortgage is paid off when you deed the property, you will almost certainly remain as the party primarily responsible for the repayment of the loan. If the lender eventually forecloses, it will be on your credit record.

If you deed your property to a third party you also give up control of the property. It is nearly always a bad idea to simply deed your property to a third party.

Do not deed your property to someone without paying off the loan unless you have consulted with an attorney.

By almost any measure a completed foreclosure is the most damaging event your credit status can encounter - worse than bankruptcy. A foreclosure on your credit record will negatively impact your ability to borrow money for years.

For most people, it is well worth the time and effort to solve the problem before the foreclosure is done.

If a Notice of Default has been recorded against your property it means your lender has started the formal foreclosure process. In California, a borrower must be two months delinquent before a lender can commence a foreclosure action by recording a Notice of Default.

A borrower has over three months from the recording of the Notice of Default to work something out with their lender and avoid the completion of the foreclosure.

Once the Notice of Default has been recorded, it is important to act to avoid losing the property and having a foreclosure on your record.

Yes, you can and you should look at a Forbearance Agreement as an option to avoid foreclosure.

A Forbearance Agreement is an agreement between a mortgage company and a borrower in which the borrower promises to stay current on the mortgage going forward and agrees to a repayment plan for delinquent payments and costs and fees associated with the foreclosure action. A Forbearance Agreement allows the borrower to keep the property.

The lender will expect you to show that the delinquency was due to circumstances out of your control (injury, illness, job loss) and that the financial difficulties have been corrected.

Sadly, there are quite a few people that might try and take advantage of your temporary misfortune. These people will try and convince you that they can provide a quick and easy solution to your mortgage problem. As a general rule, if it seems too good to be true, it usually is.

Here are a few examples of the scams you could encounter:

You need to sell your property fast or you will be ruined.

If you have equity, these guys want it by providing fast cash. They solve your problem and they get your equity. Occasionally they offer a small amount of money to you - which is normally a signal they are getting lots of your equity.

Sign the deed to the property to us and we will take care of everything.

Sometimes called the "Bailout" scam, the investor tells the homeowner that he will be allowed to stay in the home and pay "rent" to the investor until a long term solution can be worked out. Once the owner signs the deed to the property over to the investor, big trouble usually follows. If the investor has the deed, the investor has control.

Here is the big kicker - the homeowner who signed over the deed is still responsible for the loan. The investor nearly never makes the mortgage payments and the homeowner gets hit with the foreclosure.

For a consulting fee, I will work with your lender to find a solution.

It is almost always illegal in the state of California for anyone, besides an attorney, to collect a fee as payment for making arrangements with your lender.

See California Civil Code Sections 2945-2945.11for details.

Your lender will work with you directly if you want to make arrangements to make up past payments and keep your property. This would normally involve a Forbearance Agreement.

While a Short Sale itself does not stop a foreclosure, lenders normally work with a homeowner and delay the foreclosure if necessary, if they receive a legitimate Short Sale proposal. The key here is to submit a complete, well-organized, Short Sale proposal.

The lender does not want your property, and would rather resolve the situation before the foreclosure is complete.

Yes. In fact, your lender would rather you sell the property than allow the foreclosure to continue.

Your lender does not want to take your property through foreclosure. Even if you have no equity in your property, the lender wants to find a solution.

This is precisely why lenders agree to a Short Sale and accept a discounted payoff to fully satisfy the loan. In a Short Sale, the lender in nearly all cases pays all the closing costs - including title fees, escrow fees and the real estate commission.

Do not avoid calls or letters from your mortgage company, particularly if a foreclosure is pending. Your mortgage company does not want to take your property through foreclosure. The mortgage company would rather look for options to avoid foreclosure.

When speaking with your mortgage company, be honest about your circumstances and listen for them to possibly suggest options. They know the best way for them to limit losses on a delinquent mortgage is to work with the homeowner.

Be sure to keep notes of all conversations you have with the mortgage company, including dates and times of calls, the name of the representative with whom you spoke and the details of the conversation.

In California a foreclosure can be completed in less than six months from the time the loan becomes delinquent. The mortgage company can record a Notice of Default, the first step in the foreclosure process as soon as the loan is two months delinquent. Typically, the first indication a homeowner gets that a foreclosure has commenced is notification of the Notice of Default.

Once the Notice of Default has been recorded, the foreclosure can be completed in less than four months.

Mortgage lenders are increasingly willing to work with borrowers facing financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship that makes it likely you will be unable to meet your obligation on your mortgage, your lender would prefer to settle the matter with you as opposed to taking the property through foreclosure.

As you consider the option of pursuing a Short Sale, remember your lender is looking to limit any potential loss on your loan. By completing a Short Sale, your lender has arrived at a solution that is, for them, much better than a foreclosure.

Bottom line, your lender wants to work with you.

Nothing. It's true, in most cases you will pay literally no sales costs if your lender approves the Short Sale. All commissions, title and escrow fees, and even most repair expenses are paid by the lender as part of the Short Sale approval. We will include the *following clause in the contract.

"Seller's agreement to sell is subject to approval by existing lender of a Short Sale at no cost to Seller. Seller shall not be required to deposit funds to close escrow."

Remember, lenders approve Short Sales and accept the resulting loss in an effort to avoid bigger losses through foreclosure.

It's easy! It is as simple as contacting us and we begin.

There is no charge to you to get started. If you would prefer to discuss it on the phone, or set an appointment, please call us at 951-736-7499.

Deeding your property to someone without paying off the loan is nearly always a bad idea. In the first place, the lender still considers you primarily responsible for payment on the loan. If loan payments do not get paid, or if the lender ultimately forecloses, this will show on your credit.

Secondly, when you deed your property to someone else, you give up control of the property. Along with the deed goes the ability to control the property.

Do not deed your property to someone without paying off the loan unless you have consulted with an attorney.

To some extent, that will depend upon the mortgage company considering the Short Sale request. Generally, so long as the hardship is real and the mortgage company believes the loan is likely to become delinquent as a result, the Short Sale request will be processed by the Loss Mitigation Department. A big key to getting Loss Mitigation to accept a hardship is to submit a strong hardship letter. The letter sets the tone for the entire file.

The "hardships" list below are common and accepted by mortgage lenders:

•         Family illness or injury

•         Illness or injury in the extended family - particularly if it forces relocation

•         Job relocation when the property is equity deficient

•         Job loss or significant income loss

•         Divorce or split of domestic partners

•         Adjustment in mortgage payment or unforeseen increase in living expenses

The answer is, maybe. Some lenders will accept a Short Sale file for approval on loans that are not delinquent. Other lenders will not accept the file until the loan is delinquent. We can put your Short Sale file together within a couple days and submit it for approval, free of charge. That is the best way to determine if your lender will accept a file for approval on a loan that is current.

There are actually several reasons why a mortgage company would approve a Short Sale payoff, including the following;

Legal Concerns - Mortgage lenders have come under legal pressure to work with borrowers to equitably resolve situations where borrowers are unable to meet their mortgage obligation, particularly when the borrower makes an effort to arrive at a compromise solution.

Asset Management Expenses- If a lender acquires a property through foreclosure, the property will be managed until it is repaired and resold. It is expensive to manage real property assets - homes - spread throughout the region, the state and possibly even the nation. Keeping properties maintained, keeping utilities on, making repairs and the administrative costs attached to these activities are all costs the lender would prefer to avoid. A successful Short Sale eliminates most of these costs

Wall Street is Watching - Mortgage lenders rely heavily on their ability to package and sell bundles of loans on the secondary mortgage market. They need to sell these bundles of loans in order to put the funds back to work by loaning the money again and collect loan fees along the way. If mortgages perform poorly after they are sold it could impact the lender's ability to sell their loans on the secondary market. A successful Short Sale gets the loan payoff resolved quickly.

Reserve Requirement- Delinquent and non-performing loans place another burden on mortgage lenders. For all delinquent and non-performing loans lenders must set aside funds in reserve to deal with potential losses. These funds cannot be put to work generating new loan fees until the bad loans are resolved. A successful Short Sale lets the lender put more money to work.

No. That is why it is critical to work with someone that has extensive experience at getting Short Sales approved.

From how to present the Short Sale package to the lender, to negotiating with the lenders Loss Mitigations Department, we know how to keep the file moving towards approval.

The first step is to get pre-qualified for a Short Sale. There is no charge for this, and it's easy.

Contact our team today for further details.

Yes. We can work with both lenders (many times the same lender holds the 1st and the 2nd loans) to put together a Short Sale transaction. Even if the value of your home is below the balance of the 1st mortgage, we can normally get the two lenders to cooperate.

In the end, neither lender wants to own another home through foreclosure.

Absolutely. In fact, lenders are more motivated to do a Short Sale on a property that needs work than on a property that doesn't. The lender knows the risk of loss goes up when they foreclose on a property that needs alot of work.

Aside from the expense of completing the work, lenders are simply not set up to get the work done. They are in the loan business, not the fix-it business.

The big key here is to avoid foreclosure. By nearly any measure, a foreclosure is the most damaging event your credit status can encounter - worse than bankruptcy. In the course of getting your short sale approved you may miss your mortgage payments, and these will show on your credit.

By avoiding foreclosure, you will likely be able to resume normal borrowing (car loans, credit cards, consumer goods, etc.) pretty quickly

You may be able to keep your home. You need to convince your mortgage company of two things:

The problem that caused the mortgage payment disruption was beyond your control - illness, injury, temporary disability or forced job change, etc.

You are now solidly in a position to stay current on your mortgage payments and make some progress towards making up the delinquent amount.

A Forbearance Agreement is a written agreement with your mortgage company in which you arrange to keep your home. Usually, this includes two primary elements:

The borrower's promise to remain current on the mortgage going forward

Some plan for making up the delinquent interest and other charges. It may mean making additional payments to the mortgage company or the delinquent amount could be added to the loan to be paid later.