Foreclosure Help

Given the wake of the recent foreclosure epidemic, I want to take some time to provide a means of knowing if you and your home are at risk. The foreclosure process is long and complicated, but it is possible to minimize your losses and the impact on your credit. The key is to solve the problem as soon as possible. Don’t wait around. The further along the process, the harder it is to stop.


There are 3 main stages the homeowners will deal with before the foreclosure process begins. The first stage is you notice it is becoming harder and harder to pay all your bills, feed your family, and make your monthly payments. Next, you realize you won’t be able to pay your next mortgage payment. And finally, you miss that payment. As I said above, the best time to solve the problem is before that payment is missed. If you are current on your mortgage, your lender will be likely to work with your to prevent missing a payment.

As soon as you know you will have trouble making your payment, call your lender. Let them know there has been a change in your financial situation. Medical bills, insurance, children, school can all be acceptable reasons for your issues. There is a good chance they can postpone the due date of the payment or allow you to double up on your next payment. The benefit of letting them know beforehand is, you are in good standing with the company and you avoid penalties and late fees.

Now, say you did the above, but you still need help. You will want to contact your lender about a loan modification. If you have not missed a payment, there is a really good chance you are eligible for one of the new government programs. You can also contact a third party mortgage broker to have them act as your negotiator which may get better terms on the modification. Finally, you can consult with a HUD-approved Housing Counselor. Find one at http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call (800) 569-4287.

Above is what you do if you know you will, but have not yet missed a payment. If you have already missed one or more payments, solving the problem becomes much harder. After your first missed payment, your lender will begin sending you letters requesting payment or to contact them. It is always a good idea to call them. You do not want your lender to think you are avoiding them. Although, technically, the foreclosure action can start as soon as your first payment is reported delinquent, in California, banks tend to wait for the loan to be 90 days delinquent before they begin the action. Keep in mind, each state has its own laws and practices and I will be mostly concentrating on California.
Ok, so here is a timeline of the foreclosure process in California. Most states are similar but it is always good to check with a real estate attorney or mortgage lender in your state. Remember, California uses Deeds of Trust as security for property loans, so it is a non-judicial foreclosure state. If your state uses mortgages as the security, then it would be a judicial foreclosure state and the timeline will be different. Also, just to clarify terms used in the timeline; the Trustee is the home owner, the Trustor (usually the lending bank) manages the loan for the Beneficiary, who is the owner of the note. The beneficiary can be a bank, private investor or other investor.

90 days (approx.) after missed payment – Lender will request to initiate foreclosure.

Day 1 – Notice of Default (NOD) is recorded with the county and Trustee’s Sale (TS) is ordered

Day 2 to 10 – Notice of Default is sent to the owner and the property address (if different).

Within 1 Month – NOD is sent to all interested parties and TS is received and reviewed.

3 Months after recording NOD – TS is prepared and sent to publication

25 Days before Sale – IRS is notified of sale

20 Days before Sale – Begin Publishing sale, Post Notice of Sale on the Property, and mail the Notice to all interested parties (same as NOD).

14 Days before Sale – Notice of Trustee’s Sale is Recorded by the County

5 Days before Sale – Buyers right to reinstate the loan expires

Day of Sale – Property is Sold, Sale is postponed or the Property reverts to the Beneficiary.

DISCLAIMER: This timeline is for informational purposes only and should not be considered legal advice or an official description of the judicial or non-judicial process. The timeline is for consumer information only and based on California policies. It is advised all consumers seek professional legal counsel with regard to any default proceeding.

Tips for Sellers - Staging the House

Continuing with advice for sellers, this article covers the staging process. Staging a home is when you make the interior as neutral and welcoming as possible. Remember from last week, first impressions are everything. There are two ways you can tackle staging your home. You can do it yourself or hire a professional. Both have their advantages. If you are going to be living in the house while it is on the market, I recommend doing the staging yourself. It shouldn’t take more than a weekend and can also make the moving process easier.


If you already moved and the house is empty, hire a professional. They can be a great asset in the presentation of your home. You do have another option if you already moved. You can leave the house empty. I don’t recommend this. Although it’s a good way to save money, it is hard for buyers to imagine what an empty house will look like with furniture in it. Every staging pro will have their own concepts and you should use similar discretion as you would when hiring a Real Estate. (insert hyperlink)

When staging a home yourself, there are 3 steps to address. The first is the removal of personal items. Next is organizing the storage and living space. And lastly is cleaning. The purpose of removing most of your personal items is to allow prospective buyers to imagine their stuff all over the place. The home should look like a blank slate.

The items you want to address are personal awards and photos. You should take most if not all of your pictures, diplomas, and/or awards off the walls. It is ok to leave some artwork, but it should be neutral. If you have kids, pack up most of their toys and put them away. Not all buyers have kids and toys also tend to add clutter. This goes for any collections you may have.

After you are done removing your personal items, you can start organizing your space. It is a good idea to get rid of extra furniture from the living and family rooms. This includes pool tables, sculptures, mounted animals, and religious figures. It’s best for rooms to look clean, simple, and organized. This gives buyers the best opportunity to visualize how the house will look when they move in. When it comes to the bathrooms, it is best if there is uniformity. It is a good idea to create some form or simple theme. At the least, each bathroom should have matching towels and floor mats. The bathrooms should also be free of unnecessary items and appliances.

Finally there is cleaning. All your previous efforts are pointless if the buyers walk in to a dirty house. Carpets need to be vacuumed and possibly steam cleaned; depending on their condition. Tile and laminate should be mopped and hardwood floors should be waxed. Remember, spending some money upfront can be very beneficial for both your selling price and the time spent on the market. Also, if your home needs it, touch up the interior paint. This can make a huge difference.

Tips for Home Sellers: Preparing Your Home for Sale

Before you start showing your home, it is a good idea to make it as presentable as possible. This includes making some repairs and/or improvements. This stage of the selling process is call “pre-marketing”.

The first part of the home you want to check is the exterior, including the yard. First impressions are very important, especially with homes. You want the buyer to pull up to your house and say “wow”. For your back yard, make sure your lawn is green and mowed and clean your outdoor furniture. The front should be as inviting as possible so you want to do the same as you did with the back, plus more. Trim the hedges, give the fence a fresh coat of paint, and make sure the drive way is clean and free of clutter. You may even want to consider planting some bright colored flowers to make the front more welcoming.

As for the exterior of the house itself, it’s a good idea to touch up the paint. Make sure mail box is clean and the numbers a legible. You also want to check for any cracks in the chimney or walls and have them filled. Finally, you should repair any loose trim or drain pipes, and clean the windows and doors.

Next is the garage. This is pretty simple. All you need to do is make sure it is organized and clean the floor. You want the buyer to feel the garage is large, with plenty of storage space. If your garage is messy, buyers will be turned off.

Finally, you need to work on the interior. As with the outside, touching up the paint is a good idea. However, you may want to consider repainting in neutral tones. Most buyers want a home that is like a “blank canvas”, ready for them to make their own. Although you may love your deep red dining room, but if someone is not particularly fond of red, it can be a turn off. Carpets and drapes should be steam cleaned and all the light bulbs need to be working. In the kitchen, make sure the counters are and sink are spotless. Also clean the stove and oven. Make sure the bedrooms and closets are clean and organized as well.

Overall, you want the house to look very clean, bright, and inviting. It is also a good idea to hire an interior designer or home staging specialist, if your home in is a higher priced area.

I hope this provides some useful information, and as always, feel free to ask a question or leave a comment below.