As leading real estate lawyers in the San Francisco Bay Area, we’ve helped countless clients find alternatives to foreclosure and keep their homes. If you’re facing foreclosure, don’t give up — we may be able to help. Contact our law firm online to schedule an appointment.
Saving up to buy a home in the San Francisco Bay Area is no small feat. With some of the steepest real estate prices in the country, it is a highly competitive market with limited inventory. When you finally sign the purchase agreement for your home, you’ll want to make sure you can keep it. Unfortunately, not every homeowner is so lucky.
The reality is that financial situations can change rapidly, and being able to afford a home this year doesn’t necessarily guarantee that you’ll be able to make mortgage payments next year. When this happens, home buyers may find themselves in danger of foreclosure — on the brink of losing everything they worked so hard to build.
If you are facing foreclosure in the San Francisco Bay Area, it’s important to understand that losing your home is not a foregone conclusion. The real estate and foreclosure attorneys at Estavillo Law Group can help you explore your legal options for avoiding foreclosure and keeping your home. This article will explore the foreclosure process, timeline, ways to stop it, and more.
Are you wondering: When is it too late to stop foreclosure? The answer depends on the specific details of your situation, but trust that we’ll help you explore every possible alternative. Schedule a consultation to get top-tier legal advice from a trusted professional.
What Is Foreclosure?
When a loan borrower stops making mortgage payments, their mortgage lender or creditor can seek to recover the loan balance through mortgage foreclosure. Foreclosure is a legal process that involves the forced sale of the property used as loan collateral, and it happens primarily when borrowers default on their mortgage payments.
In many cases, foreclosure occurs as a result of financial difficulties, such as a job loss, unexpected medical expenses, reduced income, or emergencies. Regardless of the reason, when the borrower is unable to meet their mortgage obligations, the lender initiates foreclosure proceedings to recover the outstanding balance on the loan by selling the property.
Several factors can contribute to foreclosures in the Bay Area, including adjustable-rate mortgages that reset to higher interest rates and higher monthly payments. Recessions and economic downturns can also lead to widespread foreclosures by triggering job losses and overall financial instability. Individual factors, such as poor financial management, excessive debt, and poor budgeting, can also lead to foreclosures.
The Foreclosure Timeline
Foreclosure is not an immediate action but rather a step-by-step process that can be stopped at various stages of pre-foreclosure. In San Francisco, foreclosure proceedings vary depending on individual circumstances but typically adhere to the following timeline:
- Missed payments. Although lenders typically allow a grace period before taking action, the foreclosure process can be initiated when the borrower misses one or more mortgage payments and enters delinquency.
- Notice of Default. After approximately 90 days of missed payments, the lender files a Notice of Default with the county recorder’s office. They notify the borrower, which marks the official beginning of foreclosure proceedings. The borrower then has three months to pay the past-due amount and stop the foreclosure.
- Notice of Trustee’s Sale. If the borrower is unable to pay before the Notice of Trustee Sale is recorded and the loan remains in default, the lender will file a Notice of Trustee’s Sale and set a date for the foreclosure auction. Typically issued at least 20 days before the public auction, this foreclosure notice must be posted on the property, published in the newspaper, and mailed to the borrower.
- Foreclosure auction. Approximately 21 days after the lender issues the Notice of Trustee’s Sale, the foreclosure auction takes place. The property is sold to the auction’s highest bidder, which is sometimes the lender if no other bids are made.
- Post-sale period. If a third party buys the property, the borrower must vacate the property. However, the borrower may be able to negotiate a move-out date with the new owners in some cases. If the lender buys the property at auction, the property becomes a Real Estate Owned (REO) property, and they can proceed with evicting the borrower.
- Eviction. If the borrower does not vacate the property voluntarily, the new property owner — whether a third party or the lender — must proceed with a formal eviction, which involves serving a notice to quit and possibly obtaining a court order for conviction before you have to move out.
When it’s all said and done, the foreclosure process in San Francisco can take several months to over a year. The timeline depends largely on the specific circumstances, the lender’s actions, and the borrower’s attempts at negotiation or legal action.
Can You Stop a Foreclosure?
There are several mechanisms by which a borrower may halt foreclosure proceedings in San Francisco. Wondering how to stop foreclosure? Here are a few of the many strategies that an experienced foreclosure attorney can help a borrower explore:
- Repayment plan. The borrower may also be able to work out a repayment plan with the lender to pay back the balance of missed payments over time, gradually becoming current on the loan.
- Forbearance agreement. The borrower may be able to request a temporary suspension or reduction of mortgage payments for a period of time due to financial hardship, allowing them to get back on their feet. Once that period is over, the borrower resumes the regular payments and repays the missed amount.
- Reinstatement. If the borrower can pay the past-due amount in a lump sum by a specific date (often up to the date of the foreclosure sale) and bring the mortgage current, they can halt the foreclosure or alternatively negotiate a lower pay off amount.
- Refinancing. A borrower may also be able to prevent foreclosure by refinancing the mortgage and obtaining a new loan with better payment plan terms, reducing monthly payments and helping the borrower catch up on missed payments.
- Short sale. With the lender’s approval, the borrower may be able to sell the property for less than the outstanding mortgage. All proceeds from the sale would go to the lender, and in exchange, the lender would forgive the remaining balance. The main benefit of this strategy is avoiding the negative credit score consequences of foreclosure.
- Deed in lieu of foreclosure. The borrower can voluntarily transfer ownership of the property to the lender in exchange for having their mortgage debt canceled, which is less damaging to the borrower’s credit than foreclosure.
- Bankruptcy. Filing for Chapter 13 bankruptcy may allow a borrower to reorganize debts and create a repayment plan to become current on the mortgage loan.
- Federal and state programs. Certain government programs, including the Home Affordable Modification Program (HAMP), offer financial assistance and other resources to homeowners seeking to avoid foreclosure.
Ultimately, the best course of action for any borrower facing foreclosure is to speak with an experienced foreclosure attorney as soon as possible. A skilled legal professional can help explore various options, communicate with lenders on a borrower’s behalf, and take legal actions to stop a foreclosure.
Estavillo Law Group: Top Foreclosure Attorneys in California
If you’re struggling to make your mortgage payments, you may be wondering: When is it too late to stop foreclosure? How do you stop a foreclosure? Rest assured, there are plenty of legal options for halting foreclosure proceedings, but finding the right strategy for your situation will likely require expert legal assistance.
Estavillo Law Group is here for all of your foreclosure-related legal needs and can help you explore the most advantageous options for your unique situation. Ready to get started? Schedule a consultation to speak with a compassionate attorney today.