Foreclosure can destroy your credit and take your home away for good. You may be wondering how to stop foreclosure in California at any point during foreclosure proceedings. Fortunately, you do have several options, and typically it takes at least 4 months (120 days) to foreclose on a house. You can take action well in advance of that to stop foreclosure—sometimes before legal proceedings even start. This guide will explain how to stop foreclosure in California, and help you to understand your options for making things right with your mortgage lender.
Critical Point: Notice of Default
Just because you're late on your payments doesn't mean you're necessarily being foreclosed on. In the current real estate market, lenders typically would like to work with borrowers, rather than foreclosing on a home. One of the best sources for information on how to stop foreclosure in California may actually be your mortgage lender.
A Notice of Default is what you are sent when foreclosure proceedings actually begin on your home—typically after your payments are quite late. If you can contact your mortgage lender before being served with a Notice of Default, you may be able to save your mortgage before foreclosure proceedings even begin. If you want to know how to stop foreclosure in California at the best time possible, always remember: it's easier before you get the Notice of Default.
Your lender may be willing to work with you to cancel payments or create a payment installment plan to help you get current on missing mortgage payments. This is especially likely if you previously had a good payment record but fell behind due to unexpected job loss or other short-term financial problems.
How to Stop Foreclosure in California After the Notice of Default
Once the Notice of Default has been filed, foreclosure proceedings will begin against your house. In California, you will have 90 days until your home is sold at auction. In this three-month period, you have the right to pay your lender any late payments in order to reinstate your mortgage. This “right of redemption” period gives you time to work on repayment before being foreclosed upon.
For information on how to stop foreclosure in California once you have already been served with a Notice of Default, you may want to talk to your lender. Some lenders are still willing to talk to borrowers even at this late stage about payment plans and other options. Ignoring the foreclosure notice is the worst thing you can do—you want to buy time by keeping communication lines open with your lender. You may also want to seek out a foreclosure lawyer who can help you understand how to stop foreclosure in California.
Deeds-in-Lieu of Foreclosure
Some people have been told how to stop foreclosure in California by using a deed-in-lieu of foreclosure. Exercise caution if you are considering this route. Deeds-in-lieu will technically stop foreclosure proceedings and won't result in your home being publicly auctioned, but it is important to remember that you will still lose your home and it will have identical effects to foreclosure on your credit report.