Question : Foreclosing a refinanced home in California?
What are the steps towards foreclosing a home that we refinanced back in 2006 in California? Will there be any specific penalties and steps to take because it was refinanced years before?
home refinance california

Best answer:

Answer by esmion
It is different from state to state. I believe California is non-judiciary so it does not take much to foreclose.

As far as a penalty because you refinance I have never heard of anything like that. Refinancing is the main reason most people are in foreclosure.

Your best bet is to find someone that specializes in negotiating with your bank and delaying the process.

This way you can stay in your home longer and you will have someone on your side trying to defend your interest.

If they bank forecloses on your house you will be responsible for the difference between what you owe and how much they sell it for plus closing cost plus lawyer fees plus, plus, plus. This is called a deficiency judgement.

Although you might not get anything from the bank for a year or two eventually they will know exactly how much money they lost, down to the penny, and then they will want it back.

If you are able to do a short sale or deed in lieu of foreclosure you are able to negotiate all of that in the process and get them to waive the deficiency judgement. They will then issue a 1099 because although the money was lost it was still money they gave you and you will have to report that to the IRS. There is a new law however that states if it was your primary residence then the 1099 will not apply.

You can also negotiate that they bank waive the 1099.

All in all the best thing to do is find someone that specializes in the whole process. Almost always it is impossible for you, the client to negotiate the short sale. The bank may let you negotiate a deed in lieu but be careful because they are still going to try and get a deficiency judgement from you.

Good Luck.