San Diego Housing Market News and Analysis

Please let me clarify and explain a situation in regards to a house that has been foreclosed to the bank. The house is located on an upscale street in the Hidden Meadows area north of Escondido and just east of Rimrock.

The couple that owns the house is going through a nasty divorce and the husband does not want the wife (or, soon to be ex-wife) to purchase the house on her own. For some unknown reason, the husband has let the house go back to the bank, even though he could have made the mortgage payment. Perhaps there is some pre nup or other contract that complicated this real estate deal.

This situation to me, is a prime example of the owner, in the future, being able to exercise his right of redemption.

Thank you for any responses.

365-day redemption only applied to judicial foreclosures. These are cases where the lender goes to court to obtain a deficiency judgment. This is rare in CA.

I wouldn't lose any sleep over this element of buying a foreclosure. There's a lot more to be afraid of, such as buying too early in the down-cycle, undisclosed issues with the property, etc.

Below is the explanation according to RealtyTrac:

"Court foreclosures only occur if a lender desires a deficiency judgment. This process gives a borrower up to one year to redeem the property after the foreclosure sale.

In almost all cases, foreclosures are handled out of court. The process begins when a lender files a notice of default with the county recorder identifying the default amount and the date the borrower must pay off the default. The notice is mailed to the borrower and other affected parties.

Up to five business days before the trustee's sale, the borrower may pay off the default plus any applicable costs of foreclosure and stop the foreclosure process. Three months after the notice of default is filed, the lender can schedule a trustee's sale of the property."

http://www.realtytrac.com/foreclosure_la...

I would rather be lucky then smart.

-Former San Diegan,

Thank you for the important clarification. Please excuse my ingnorance, but how can I tell if a foreclosure is judicial or not?

If the loan was an original purchase loan, the lender has no recourse and cannot obtain a deficiency judgement. So, in those cases there is no redemption period opportunity for the borrower.

If there is a judicial foreclosure then there must be a judgment against the former owner. I suppose this would show up in public records at least.

Since I've never taken foreclosure purchases seriously, I don't know how to determine at auction whether a particular property is a judicial foreclosure or not. Maybe someone else knows.