California Home Foreclosure process- an alternative to home loan

The foreclosure procedure in California is a combination of judicial, non judicial and statutory procedures. California is known for its one - action rule by which the lender can choose the course of one action to be taken against the borrower in the event of defaults by the borrower. Thus if the lender chooses to proceed with foreclosure settlements out of court then he cannot file a lawsuit for covering deficiencies since it would be a second action. The foreclosures in California mostly take place out of court.

The foreclosure process begins with a notice of sale being issued to the borrower. This notice is non judicial and details the address and phone number of the person conducting the sale. A copy of the notice is published in the newspapers 20 days prior to the prescribed date of sale. The same is also put up in a public place around the time of advertisement in the paper. The sale process is non judicial and hence hassle free. The sale is conducted in a public auction and the property handed over to the highest bidder. The sale of properties can be postponed by making public announcements indicating the same. The borrowers have the right to repurchase their property up to five days before the foreclosure auction in a non judicial foreclosure process.

The process is simple and takes less time as compared to judicial foreclosures. Since the settlements are out of court the borrowers can try to negotiate with lenders and try to get their loans modified or even ask for a refinance. If the borrowers successfully convince the lenders then they can save their homes. Sometimes the lenders even agree to reduce the rate of interest or extend the amortization period which can help the borrower to get a hold on his finances and start repaying the monthly installments in time and promptly.

The borrower can also take help from family and friends and try to buy back the home from the foreclosure auction conducted by the lender. This is very convenient since there is no need to take any home loans. The lender is concerned only with his money which he gets back after the sale and transfer of the property. The borrower gets back his home and he can devise a new financial plan to pay back his friend or family who helped him in the first place.

Thus the cumbersome process of the home loans can be avoided.  The prices of properties quoted in auctions in California are very low and it might be possible to buy a home for as much as 50% of the original market value of the property. Thus people who are planning to buy a home and are ready with a down payment amount actually might be able to buy a nice good home for the same money. May be if they can arrange some more finance they can escape the hassles of applying and waiting for approval of a home loan and become home owners directly without any debt burden.