On Dec 6, 10:51 am, "Stuart A. Bronstein" <spamt...@lexregia.com> wrote:
> Technically it is unlikely that the homeowners would have the right
> to "foreclose." Instead you have a different kind of lien, and can,
> under some circumstances, have the property sold to satisfy the lien.
> It looks like a foreclosure but it's not exactly the same thing.
Really? What does "foreclosure" mean in CA? In MD, and I thought everywhere else, it refers to a legal process
that, if followed to its conclusion, can force a sale of property held subject to a recorded lien, which lien arose either as collateral for a loan pursuant to a written security agreement (a "mortgage") OR to satisfy a money judgment
The following definition is from Law.com's online legal dictionary at
http://dictionary.law.com/default2.asp?selected=763&bold=||||
"foreclosure
n. the system by which a party who has loaned money secured by a mortgage or deed of trust on real property (or has an unpaid judgment), requires sale of the real property to recover the money due, unpaid interest, plus the costs of foreclosure, when the debtor fails to make payment. After the payments on the promissory note (which is evidence of the loan) have become delinquent for several months (time varies from state to state), the lender can have a notice of default served on the debtor (borrower) stating the amount due and the amount necessary to "cure" the default. If the delinquency and costs of foreclosure are not paid within a specified period, then the lender (or the trustee in states using deeds of trust) will set a foreclosure date, after which the property may be sold at public sale. Up to the time of foreclosure (or even afterwards in some states) the defaulting borrower can pay all delinquencies and costs (which are then greater due to foreclosure costs) and "redeem" the property. Upon sale of the property the amount due is paid to the creditor (lender or owner of the judgment) and the remainder of the money received from the sale, if any, is paid to the lender. There is also judicial foreclosure in which the lender can bring suit for foreclosure against the defaulting borrower for the delinquency and force a sale. This is used in several states with the mortgage system or in deed of trust states when it appears that the amount due is greater than the equity value of the real property, and the lender wishes to get a deficiency judgment for the amount still due after sale. This is not necessary in those states which give deficiency judgments without filing a lawsuit when the foreclosure is upon the mortgage or deed of trust."
[Me again]
This is _not_ the same thing as a seller on the installment plan, who does _not_ give full title to the buyer until the purchase price is fully paid, who simply repossesses the property (house, car, TV set, whatever) if payments aren't kept up. In a typical modern real estate transaction, the lender is a third party to the deal between the seller and buyer; the seller gets fully paid at closing of escrow (settlement) by funds furnished by the lender, and the lender in turn gets a recorded lien against the property which it can foreclose upon in event of default. But the lender does NOT typically want the property "back" in that case; they just want their _money_ back, and the only way to do that is to force a sale. The lender, or other lienholder, IIUC does _not_ get title to the property, and is not in the chain of title for future buyers, unless the lender just _happens_ to be the one who buys the property at the foreclosure sale, which they usually will do only if there are no other buyers willing to pay at least enough to pay off the lender's lien that they foreclosed upon in the first place, and any other liens senior to that lender's.
At least, that 's the way it works in MD. Perhaps Stu or Barry Gold (who posted a similar response on this thread) could explain why and how it works out differently in CA.
[OP wrote:]
> > if the property is worth less than
> > the loan balance, will we just be accepting a financial liability
> > by foreclosing?
>
> It is very unlikely that a lender would make a loan on the property
> if their mortgage could be lost so easily.
Agreed.
<snip>
> If your homeowners association doesn't have a lawyer, you'd better
> get one now. Otherwise you could end up losing a whole lot more than
> you stand to gain.
Another Very Good Suggestion.
--
This posting is for discussion purposes, not professional advice.
Anything you post on this Newsgroup is public information.
I am not your lawyer, and you are not my client in any specific legal matter.
For confidential professional advice, consult your own lawyer in a private communication.
Mike Jacobs
LAW OFFICE OF W. MICHAEL JACOBS
10440 Little Patuxent Pkwy #300
Columbia, MD 21044
(tel) 410-740-5685 (fax) 410-740-4300
No comments:
Post a Comment