California AB 2424 Gives More Time for Pre-Foreclosure Sales
Clarity on title, closing, and risk without the noise.
In the beginning of the month, I had the luxury of travelling to Ireland, hanging with locals for an Irish Trad Music festival. I took a couple of days to travel in a rental car. I really made the best of my 10 days out there. Read more in my blog!
Read more in my blog
Foreclosure
There are many reasons homeowners face pre-foreclosure. It hits owners in nearly every market, more in certain regions, but it can happen to anyone. Aside from an owner being in a hard place financially, this can come about for couples going through divorce, families who may have lost a breadwinner, the passing of an owner who had a reverse mortgage or often the passing of owner whose estate is now going through probate.
Timeline
Regardless of the situation, the loan will eventually fall into default, and the remedy is often to sell. The timeline for a non-judicial foreclosure starts with 90 days from Notice of Default, followed by a Notice of Trustee’s Sale giving just 21 days before an auction. In many cases, a home may be listed for sale in the middle of this process, leaving little time to sell the home. AB2424 changes all of this, allowing more time to sell and more time for the escrow process.
At a glance
What is it?
Before I begin to explain this, I must say, THIS IS NOT MEANT TO BE LEGAL ADVICE, borrowers must defer to a HUD certified counselor or attorney for proper advice and seek proper instructions from the servicing agent for their home loan for the best outcome.
CA AB-2424, which was made effective January 1st, 2025, applies to owners of 1-4 unit residential properties and prohibits a mortgage lender from carrying out an auction for 45 days so long as they receive a copy of an executed listing agreement at least 5 days prior to a scheduled auction. Once there is an executed purchase agreement, the lender must forego the auction an additional 45 days before holding an auction. This basically buys everyone 90 days beyond the previous timeline.
Read the AB 2424 document
Open the attached PDF to review the legislation in more detail.
Questions?
If you are working with a seller in pre-foreclosure or any tough situation, my team and I at Consumer’s Title are here to assist in making the closing process as seamless as possible. We have quick turn times for preliminary reports and other requests from the parties involved and I’m also here to look over the process should you need extra assurance.
If you have questions regarding title on your upcoming real estate transactions, reach out now to get clarity on the process.
See you next month!
-Joe
