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An Article
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SUPPORT ASSSEMBLY MEMBER DARRELL STEINBERG'S BILL - AB2598
Ban Non-Judicial Foreclosure by Neighbor - It's Un-American
May 27, 2004
By
Joe Homeowner
Copyright Joe Homeowner
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Speaking plainly, I am not a lawyer but before I became a board member the HOA used judicial foreclosure, what comment #1 points out - although for an HOA it will not likely be a factor - is that in judicial foreclosure UNDER CERTAIN CIRCUMSTANCES one can pursue a DEFICENCY JUDGMENT. In other words, say you buy a condo with no money down for $250,000, you can not continue to pay the mortgage - techincally a deed of trust. The lender has two options
(1) non-judicial foreclosure-the whole raison d etre for non-judicial foreclosures was TO KEEP THE COURT SYSTEM out of the foreclosure process. Due to the great depression, California is one of the few states that prohibit deficency judgments in a non-judicial foreclosure. In other words, if the condo goes for $225,000 instead of $250,000 the bank loses the $25,000
(2) judicial foreclosure-In certain cases, the lender can pursue you for the $25,000 deficency but not if the mortgage was used to purchase the property. Judicial foreclosures is ALMOST NEVER USED in residential real estate.
One can debate the question of : Should an HOA have the right to foreclose on a delinquent homeowner ? I suggest everyone look at my post in the forum section under General Homeowner's dated 5 / 16 / 2004 with the topic HOA foreclosures from a Treasurer's point of view. Not my idea, but I like the idea of lumping the HOA dues with the county property tax as property tax HAS ABSOLUTE PRIORITY over mortgages and liens. As a HOA treasurer, I don't worry about late dues but worry about UNCOLLECTABLE DUES.
Posted Jun 7 2004 5:07AM CEST
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Stephen Hohs
(View Profile)
, California |
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Sorry, you will have to explain that one in plain english - like so many problems with legalese - the meaning gets lost in the mumble.
Unless we are mistaken, we are talking ONLY about non-judicial foreclosure by HOA neighbors here. ANY kind of foreclosure should ONLY be an option for a bank that loaned the money to buy the house - and yes, unfortunately, property taxes are included in that.
A non-profit membership club like an HOA should NEVER have the power to foreclose - judicially or non.
Posted Jun 5 2004 2:53AM CEST
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Username withheld
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I think that all of the facts should be known about judicial foreclosures. Judicial foreclosures can and do involve deficiencies. In other words the judicial foreclosure can leave the former homeowner at the mercy of creditors long after the loss of the home. Let's not tell half of the truth; lets tell it all.
I am not a lawyer or involved in anything related to the legal or real estate profession
"Cal. Code Civ. Pro. 580d bars a deficiency following a non-judicial foreclosure. Prior to its enactment in 1940, creditors could obtain a deficiency (unless barred by Cal Code Civ. Pro. 580b) following either judicial or non-judicial foreclosure, but judicial foreclosure was (and still is) subject to redemption for a year following sale and non-judicial foreclosure was (and still is) free of any right of redemption following sale. Enactment of Cal. Code Civ. Pro.580d is therefore said to have created a "parity of remedies," allowing the creditor to elect between judicial foreclosure (with a right to a deficiency but subject to a statutory right of redemption) and non-judicial foreclosure (with no right to a deficiency but free of the right of redemption).
By barring a deficiency following non-judicial foreclosure, the hope was to discourage underbidding, a result supposedly accomplished for judicial foreclosure sales by the statutory right to redeem, following foreclosure, for the amount bid at the foreclosure."
www.scu.edu/law/FacWebPage/Neustadter/sdbook/main/commentary/48.html
Posted May 28 2004 4:04PM CEST
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Username withheld
, California |
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