What is a Non-judicial Foreclosure? The simple answer, the lender will auction off your house.
As the name would imply, non-judicial foreclosure does not involve a lawsuit. The lender issues the homeowner a Notice of Default and a notice of its intent to sell the homeowner's property. The trustee must record the Notice of Default in the recorder's office in the county in which your property is located. The Title Insurance Company involved in your original purchase of the property can be helpful in clarifying whether the Notice of Default was properly filed.
With foreclosures at the highest levels since the Great Depression, lenders are overworked and short staffed. This can be a positive factor for a homeowner facing foreclosure. There are occasions in which a trustee mistakenly records against the wrong property, a transposed street address or in the wrong county. Be on guard of clerical errors, transposed street numbers, or misspelled names invalidate the foreclosure. This does not mean you are "home" free, pardon the pun, but what it does do is give you another 90 days as the lender needs to start the foreclosure process over.
The Homeowner has 3 magic words to stop a foreclosure in its tracks..."Produce the Note." In the mortgage meltdown we are experiencing it has become painfully obvious that mortgages have been packaged and resold to investors on Wall Street who have bought a group of property, yours included. If the lender cannot PRODUCE THE NOTE, then how can they foreclose? Foreclosure judges are throwing cases out of court under these circumstances. If the company serving you with a Default Notice is unable to PRODUCE THE NOTE, then get to an attorney fast.
If an error is found in the Default Notice, do not wait until the last week in the foreclosure before advising the trustee of their mistake. Send a letter to the trustee advising him/her of the failure to properly record the Notice of Default and demand that the trustee start over. This letter should be sent by Certified Mail with return receipt requested. If you hand-deliver the letter, be sure you have a copy that can be signed as proof of delivery.
If the trustee ignores your request, you have the right to file a lawsuit to stop the sale. This will give you more time to navigate through the foreclosure process. You can demand the foreclosure be stopped until the trustee starts the foreclosure over again beginning with a new Notice of Default. A word of caution: be sure your lender has your current address. The trustee is only obligated to send a Notice of Default to the address listed in the deed of trust, so if you are renting the property or you have moved out of the house you may not receive these legal documents as the lender may only have the last address you provided them.
The Notice of Default must be published in a newspaper of general circulation in the county where your property is located. This is a requirement in most states. The notice must be published within days after the recording of the Notice of Default and must be published weekly until the sale. As the property owner you have a right to receive an Affidavit of Publication from the trustee and copies of the newspapers in which the notice appeared.
It is your right to request and receive a Beneficiary Statement from your lender after you have received the Notice of Default. Request this statement in writing.
As in judicial foreclosure, the homeowner has a chance to stop the sale by paying the default amount owed or by coming to an agreement with the mortgage lender. This agreement may include setting up a repayment plan and being allowed the option of delayed payments for a specified amount of time. The property owner can also stop foreclosure by filing for either Chapter 13 or Chapter 7 bankruptcy. If the homeowner fails to stop the foreclosure, the house is auctioned off in the same manner as a judicial foreclosure.
Lenders are now doing Loan Modifications, which will be very popular now that the Obama stimulus process is falling in place. Some lenders are reducing interest rates to an all time low of 4.5%. The modifications are for 5 years, and then the loan reverts back to its original interest rate. People need to qualify for these modifications and not everyone can benefit, but for those who do it is a great breathing space to get back on your feet financially.
Author Resource:-
William Dorich is the author of 7 books including his newest, Defeat Foreclosure and The Nursing Home Crisis.A pioneer in independent publishing he has published 130 title including Witness to War for the Los Angeles Times which won a Pulitzer. To learn more see
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