Friday, October 29, 2010

Is it Safe to Buy a California Foreclosure?

Is it safe to buy a California foreclosure?

bought a foreclosure

Question:  I bought my home from a major Bank that does business in America, do I have to worry that they did not own it legally and it can be taken from me? 

Answer:   No. Especially if the property is in California.  Over the past few weeks I have had several conversations with attorneys and title companies and the consensus is that, particularly in California, the latest brouhaha on foreclosures will not affect your homeownership.  

What is the risk?A quick recap for those on vacation abroad recently.  It has come to light that in processing tens of thousands of foreclosures a week most major lenders were using "robo-signers" to process foreclosure documents.  In some cases it was discovered that the paperwork used in court to foreclose on property was inaccurate or fraudulently attested to by bank employees.  The explosive nature of the news caused Bank of America to halt all foreclosures in process nationwide until they could conduct a review.  Attorneys General for all states created a join investigation process to determine if their state laws and federal laws were violated that resulted in illegal foreclosures.

The question that was part of the story is, if someone was foreclosed upon in what was proven to be an illegal process can that someone sue to get their home back?  Sure they can sue but will they win?  Probably not if the bank has resold the home and probably not, but less so, even if the bank still owns the property. 

In California the answer is almost absolutely not since California practices non-judicial foreclosures for residential real estate.   non-judicial foreclosuresMeaning the foreclosure process does not involve a judge and a hearing as it does in other states.  Because of this the chances greatly decrease that a judge revokes a prior ruling of foreclosure.

Should the prior owner of your home make a claim to title and for some reason a court rules in favor of returning title, chances are very high that your title policy will cover the claim and either pay-off the prior owner or buy you out.  Almost everyone I spoke to about the matter however was of the opinion that the likeliness of such a claim being successful is very, very slim.

loan default leads to foreclosureWhy?  The primary reason such a claim would not make it very far is because of the root cause of the problem.  Someone signed a Promissory Note.  That note said in part above the signature line "...I promise to pay...."  Someone at some point failed to make payments.  Failure to make payments results in foreclosure.

Go ahead and redecorate the living room and plan the kitchen remodel, you are safe at home. you are safe at home


Source:  This article was originally posted by Dennis C. Smith, Stratis Financial Corporation, mortgage broker, Huntington Beach, CA, October 22, 2010.  This article is copied here with permission granted by the author. 


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Harrison K. Long - Business Solutions and Advisory - REALTOR® and broker associate, Coldwell Banker Residential Brokerage - Phone: 949-854-7747  -  CA DRE 01410855 -  -  -  -   -  -  -  - - 

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Disclaimer and warning:  This is for information only and not the providing of legal or tax services.  A person who wants to buy a California foreclosure should consult with an attorney, check out the property as much as possible with physical inspection, confirm that it is not occupied, check out tax liens, work with a qualified REALTOR agent, get a preliminary title report and the best possible homeowners title insurance policy. 

Posted via email from Explore OC Homes


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