California Foreclosure Law: Here’s How to Stop Foreclosure Even If Your Home Is Sold at Auction
California Right of Redemption Law
Many states have foreclosure laws that grant homeowners a way to reclaim their home, even if it’s sold at auction. What is it? Foreclosure laws known as right of redemption laws. Not all states have them and for those that do, the rights they grant homeowners vary widely. Following is a general overview of what rights of redemption laws are.
Mortgage Foreclosure: What are Right of Right of Redemption Laws?
When a home is foreclosed on by the lender, certain states have laws on the books that give homeowners an opportunity to get their home back. This is known as the property owner’s “right of redemption” period. Rights of redemption laws are totally wholly statutory. What this means is, a state must have specific laws on the books that grant property owners this right.
Now that you know what the right of redemption laws are, let’s take a look at how they can help you prevent foreclosure in California.
Mortgage Foreclosure: What Makes California's Right of Redemption Law Different
In California, the right of redemption laws are not as clean cut as they are in some other states. For example, the right redemption period can be as little as three months, or as long as 12 months. How long this timeframe is depends on whether or not a property sells for enough to pay off the existing loan.
California Foreclosure Law: The 3-Month Right of Redemption Period
Unfortunately for a homeowner, if the home sells for enough to pay off the loan, the right of redemption period is only three months.
California Foreclosure Law: The 12-Month Right of Redemption Period
If a home does not sell for enough to pay off the secured debt, the right of redemption period is extended to 12 months – good news for homeowners who want to save their home.
California Foreclosure Law: When Right of Redemption Laws Don’t Apply
There are cases where right of redemption laws don’t apply in California, ie:
Deficiency Judgments: If a lender gives up their right to obtain a deficiency judgment against a homeowner, right of redemption laws are not applicable.
Non-judicial Foreclosures: If your lender chooses the non-judicial route of foreclosure (and most do), then right of redemption laws don’t apply.
Avoiding Foreclosure: How Do I Save My Home Using Right of Redemption Laws in California?
In short, you have to pay the piper. This includes paying the “redemption price” of the property. The redemption price is the purchase price the person who bought it paid for it at auction. In addition to this, you must also pay the costs the seller accrued. This can include everything from back taxes, to liens and assessments, to legal fees.
More Helpful Info on Stopping Foreclosure in California
Learn much more about stopping foreclosure in California using right of redemption laws, eg:
**The difference between judicial and non-judicial foreclosure;
**When right of redemption laws DO NOT apply;
**How long the foreclosure process takes in California, etc.
Want more info on the home foreclosure process in California? Here's also a simplified overview of CA foreclosure law.
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