| California properties turn into California foreclosures when homeowners aren't able anymore to make principal and/or interest payments on their mortgage and, as a result their lenders have the right to confiscate and sell the property as predetermined in the terms of the mortgage contract.
The type of the California foreclosures will depend on whether or not the borrowers want to keep the property. If the do not want to keep the property, then the owners can sell the property themselves before the mortgage forecloses. The advantage of doing this is that the borrowers will not have their credit record stained by a foreclosure judgment. And this is an important factor in allowing them to secure finance easier in the future. This alternative of selling the California foreclosures before they actually foreclose will probably be open for more homeowners who have equity in their properties.
Another option available to borrowers when it comes to California foreclosures is to file bankruptcy. Homeowners can either file a Chapter 7 or a Chapter 13 bankruptcy. The Chapter 13 bankruptcy is made use of when the borrower wishes to reorganize their debts and go on to pay what is outstanding. Filing this type of bankruptcy can permit the borrowers to keep their property. The Chapter 7 bankruptcy entirely discharges any debt that the borrowers may have accumulated under the mortgage. Of course there are serious consequences to filing bankruptcy, which includes severe damage to the borrower's credit rating. For those borrowers who are considering the later option, it is very important to consult experienced professionals to determine if this is indeed the best option for them.
A final option for dealing with California foreclosures is to voluntarily deed the property to the lender by making use of a "deed in lieu of foreclosure" or "deed in lieu of forfeiture". This deal will appear on the borrower's credit report and it may make negotiating with some lenders afterwards difficult depending on the California laws. If borrowers want to go with this option, it is usually advisable to have a lawyer or an experienced credit counselor for assistance.
Back to Articles...
| 
