Foreclosures  Temecula - Murrieta, California

To search for Foreclosed Homes click here. Foreclosure Properties are homes currently in the process of being repossessed by one of its lenders/mortgagees. The process is formerly known as non-judicial foreclosure. In other words, the loan is secured by the property itself and if the owner/mortgagor fails to meet his payment obligations, the lender can take ownership of the property. The process is handled by a Trustee rather than a law judge.

As a buyer interested in buying a property that is in this stage, following are the options:

After a notice of default (NOD) is filed by the lender with the County Recorder’s Office, an offer can be made to the owner. In all likelihood, the property is worth less than is owed. Otherwise, it would be likely that the owner would have sold it himself to escape his financial predicament. As such, the offer would be written as a ‘SHORT SALE’ subject to approval by the lender(s). The process needs to be handled by a real estate agent who understands the ‘short sale’ application processes of the various lenders. If the lender decides the offer is enough to be a more attractive option than foreclosing and selling the home on the open market, the sale will be approved.

When 90 days have passed, and the loan has not been made current, the lender files a new document with the County Recorder’s office called a Notice of Trustee’s Sale. This notice makes public notice of the time, date, and location of the place where the property will be sold to the highest bidder with a minimum bid established by the lender who is foreclosing. This location is commonly referred to as “the Courthouse Steps”. These auctions are often, literally, on the steps or front lawn of the County Courthouse. Bidder’s need to bring cashier’s checks (some in small denominations – in order to pay in ‘exact change’) to complete the purchase should they be the winning bidder. Yes, you pay CASH.

Before arriving as a bidder, research needs to be done to identify other debt with liens against the property being sold. If you purchase the property, your ownership will be subordinated by the pre-existing debt (other than the lender who is foreclosing). Prime examples are tax liens, HOA liens, mechanic’s liens, and second or third trust deeds (other mortgages). If you take title to the property with other liens attached, you will not be able to sell the property, with clear title, and the property will be subject to foreclosure by the other lien holders. So, paying off these lien holders needs to be factored into your analysis of what offer price will make the purchase a good one. In the foreclosure environment we are in currently, a majority of properties being foreclosed have large second mortgages. In most cases, the only way to make such a purchase feasible is to pre-arrange a negotiated payoff of the second mortgage prior to the auction. This factor plus tax, HOA, etc. liens, make the worth of purchasing properties at Trustee Sale less attractive. It is likely that if a home does not sell as a short sale, the next opportunity to purchase the home will be on the open market after the lender takes title and sells it on the open market through their designated Real Estate Broker (See Bank Owned or REO Homes).

Contact us to learn more about purchasing foreclosed homes in Temecula and Murrieta, California.