|I represented the Buyer in this purchase
|10373 Penrod Ln - Fannie-Mae Owned
Foreclosure is the ultimate outcome for homeowners who have
exhausted all pre-foreclosure options, including a short sale. There are two types of foreclosures: judicial
versus non-judicial. How the
home mortgage loan was first financed and whether it was subsequently refinanced often determine the type of foreclosures.
When someone buys a home to live in (not for investment) and finance it with a loan, that type of loan is usually a purchase-money
non-recourse loan. When a California homeowner defaults on the payment, lenders do a non-judicial
foreclosure by taking back the house.
when a homeowner has refinanced their primary residence at least once, the mortgage loan (called a non-recourse purchase-money
loan) becomes a recourse loan and is subject to judicial foreclosure, which is done through a court action, resulting in a deficiency judgment against the borrower or homeowner.
The court can order the homeowner to pay the difference between the amount owed and the net proceeds obtained by sale or the
fair-market value of the home used to secure the debt. In California the bank or lender has a 4-year time window to
file a court action after the defaulting homeowner of a recourse loan for the deficiency even after foreclosure. Once
filed, that court process can drag on for years. This information is provided only for educational purposes and should
not be taken as legal advice. Please check with a California real estate lawyer to verify the accuracy of the information
given above and elsewhere on this website.
of foreclosures for owner-occupied primary residence in California with a non-recourse loan are not
judicial foreclosures. Rather, they are non-judicial foreclosures
through a trustee's sale, which is quicker and less costly. A trustee is not the lender, but some entity--a legal firm
or an individual--that the lender assigns or subcontracts. The legal basis for a trustee's sale is contained in a power-of-sale
clause in the mortgage loan document.