Foreclosure is confusing!

[dustijane]

I have tried to read the posts and answer my own questions but I still have a lot of confusion with how foreclosure works.

I live in California. We were discharged in September 2011, included our house. We definitely want to let it go. We stopped making payments in March I believe, so we are about 9 months behind. I called the bank, Wells Fargo, today just to see where things are at and they said my home is in "active foreclosure" and the next step will be to set the sale date, however they couldn't tell me when that would be. I just have no idea how much longer we can stay, and a large part of me just wants to rent a home already and start over. I am so ready for this chapter to be over. I also want to get into a new school district before the next school year begins. Further, I am scared that we are going to stay and stay, and then one day we are told we have to move in 30 days. It is not easy to find a decent, affordable place that is large enough for our family in our town, and I am nervous about moving somewhere feeling rushed and then wishing we had rented somewhere else.

And thoughts on where we are at in the whole process? What should I expect to happen next? ANd is there anywhere else that I can get more info on my property and where it is at?

[Isobel]

Hi dustijane -

You and I are in a very similar situation:
I stopped paying 1st and 2nd in Feb 2010, Ch 7 filed July 2011 , discharged Oct 2011.

I started looking at rentals right when I stopped paying, so I'd have an idea of what to expect. I was offered several places (no one gave a rat's butt about the bk), and found an amazing place which I moved into in Sept. I could have stayed in my house a while longer, but it is true: after Notice of Default, next step is Notice of Sale, which will give you 20 days (but I suppose they could evict you if you stayed). Yes, the California rental market is such that, you need longer than that to find a new place that you like! You might get some inkling about how long you might have in the house at this link which gives averages of foreclosure timelines by zipcode: http://www.foreclosureradar.com/fore...rt-august-2011

Here's an idea: move into a rental and rent your house rather than letting it sit vacant. That's what I'm trying to do with the idea that it helps me recover from the bk, helps the neighbors and neighborhood and gives someone a below-market rental for a while. My bk attorney said several other clients of his did it, with no repercussions. However, most mortgages are signed with "Assignment of Rents" agreements which means your mortgage company is supposed to get any rents if the property is in default and rented. But is it valid if the note is discharged in a bk? I don't know. Also, would a lender bother pursuing you for rent money? (may cost them more to pursue than just let it go - plus, isn't it good for them for the property to be occupied?).

I have conflicting info re: whether legally you have to fully disclose that the property is in default to potential renters. But on ethical grounds alone, I am being completely upfront as I advertise my home-in-default for rent. Most people don't want the uncertainty, even though I've listed it below market value as a "month-to-month" rather than lease and my town has a "just cause" requirement in case of f/c. (In fact, I wonder how many homes out there for rent have had Notice of Defaults filed but the owners are not being upfront with potential renters?)

Anyway, I hope that helps and I wish you the best of luck!

Isobel

[slam22]

In regards to Wells Fargo's statement that your house is in "active foreclosure". Did you ever receive a Notice of Default that was recorded in the county in which you live? I would check with your county's assessor's office first. In the state of California if the bank has not recorded a Notice of Default with the county then foreclosure proceedings have not started. In California a Notice of Default is good for 90 days. At that point they can record a Notice of Trustee sale. The sale would occur a minimum of 21 days after that. Bottom line is that if they never have recorded the Notice of Default then you have at least four months before you would have to out of the property.