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Foreclosures / Lien Stripping

Understanding California Foreclosures:

A foreclosure begins with the recording of a Notice of Default. This notice gives the homeowner 90 days to reinstate the loan. After the 90 days expires, a Notice of Trustee Sale is recorded. This notice sets the actual sale date, time and place of the property 21 days later.

At the conclusion of a foreclosure the property is either purchased by a 3rd party or reverts back to the bank. In either case you cannot just be locked out of your property. The new homeowner must file an unlawful detainer action. In most cases when the property reverts back to the lender - they will make a cash for keys offer where they will pay the former homeowner some money for relocation costs so long as they vacate the property before a specific time and leave the property in good condition.

Stop the Foreclosure and Save Your Home

Chapter 13 offers you an opportunity to pay back payments over 5 years without your lenders approval. If time is running out, filing chapter 13 immediately stops the foreclosure process. This form of relief is not for everybody. Our office can help you determine whether this option is available to you.

Lien Stripping (Motions to Avoid Liens): Get rid of 2nd trust deeds and other secured lines of credit as long as the value of the property is LESS than the amount of the first trust deed:

Example #1: The home is appraised or known to have a value of $450,000.00. The first trust deed owed to ABC Bank is $460,000. The homeowner also has a second trust deed owed to CBA Bank in the amount of $100,000. In this example, the homeowner can file a motion to avoid the lien of CBA Bank.

Example #2: The home is appraised or known to have a value of $450,000.00. The first trust deed owed to ABC Bank is $400,000. There is a second owed to CBA Bank in the amount of $60,000 and a third owed to XYZ Bank in the amount of $40,000. In this example, the homeowner can only file a motion to avoid the lien of XYZ Bank.

Example #3: The home is appraised or known to have a value of $450,000.00. The first trust deed owed to ABC Bank in the amount of $400,000. There is a second owed to CBA Bank in the amount of $60,000. In this example the homeowner cannot file a motion to avoid the lien of CBA Bank

To get this relief you must file and complete a Chapter 13 plan:

This relief is only available to debtor(s) in Chapter 13. When the motion is filed and approved, the obligation to pay the lender is suspended. The debt owed to the lender is treated as an unsecured debt (like credit card obligations). The lender must record a reconveyance deed upon completion of the Chapter 13 plan.

Contact our office for a free, no obligation consultation at any of our convenient locations.

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