Sacramento short sales can sound as confusing to people as participating in a four-way traffic stop in Davis, California. They don't know what to do. Especially when a seller receives a foreclosure notice such as a Notice of Default.
One of my sellers sent me an email yesterday, sounding very panicked. She was concerned that she no longer could sell her home as a short sale "to that guy." The reason? She received a letter from her lender telling her that if she did not make a payment by August, her home would go into foreclosure.
I'm figuring that regardless of what Paul Simon says, no man is an island, and other people most likely don't understand how foreclosure works, either, so I am going to lay it out for you.
As a Sacramento short sale agent, I have represented some sellers who haven't made a payment in years and the bank never filed a foreclosure notice. Banks aren't required to foreclose within any particular time period, but the following is how it's generally done during the minimum time period. It could take longer.
- Let's say it's August 1 -- yeah, like today -- and the seller hasn't made a payment since May. Shortly after June 15th, the bank sent out late notices and called to try to collect. The seller is now 60 days delinquent. Most banks will wait at least 60 days before taking action.
- A relatively new law requires the bank to notify the seller 30 days in advance before filing a Notice of Default. So, on August 1, the bank sends the seller a notice of intent that says if payments and late fees are not received, the bank will foreclose.
- On September 1, the bank files a Notice of Default in the public records. This is known as the 90-day publication period.
- On December 1, the 20-day publication period in a newspaper of general circulation commences.
- Then, on December 21st, just in time for Christmas, the home can be sold on the courthouse steps at a public auction or it could go to the bank. It doesn't "go back" to the bank because the bank never owned it in the first place. The trustee has naked title.
If you're in the middle of a short sale during this time period, your short sale agent can ask the bank to postpone the auction. If the bank is considering a short sale offer, the bank, at its discretion, may postpone the auction either for 30 days or indefinitely. If the bank does not have an offer on the table, it most likely will not postpone the auction.
There is no guarantee that you will get the auction postponed. And to throw icing on the cake, most banks won't let a short sale agent submit a request to postpone the trustee's sale until 3 to 5 days before the auction is scheduled.
Photo: Big Stock Photo
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Certified HAFA Specialist
My Sacramento Real Estate Listings
Elizabeth Weintraub is an author, home buying columnist for The New York Times-owned About.com, a Land Park resident, and a Land Park real estate agent who specializes in older, classic homes in Land Park, Curtis Park, Midtown and East Sacramento. Weintraub is also a Sacramento Short Sale agent who lists and successfully sells short sales throughout the four-county Sacramento area. Call Elizabeth Weintraub at 916.233.6759. Put 35 years of real estate experience to work for you. Broker-Associate at Lyon Real Estate. DRE License # 00697006.
The Short Sale Savior, by Elizabeth Weintraub, available at Amazon.com.
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
Photo: Unless otherwise noted in this blog, the photo is copyrighted by Big Stock Photo and used with permission.
The views expressed herein are Weintraub's personal views and do not reflect the views of Lyon Real Estate.
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