Several clients have asked whether they can remove personal property from their home while it’s “in foreclosure”.  Another client wanted to know what the rights of the foreclosing creditor were to come into her home before any sale was held.

Be clear:  it’s your property until there is a foreclosure sale. Your rights to the property are unchanged by any default on the mortgage payment.  Likewise, the lender is still an outsider unless and until it obtains title to the property by being the highest bidder at the foreclosure sale.

I’m fascinated by the concept of being “in foreclosure”.  It seems to be akin to being  ”in collections”.  Neither are real places, or even changes in your legal rights.  Yet laymen seem to think of them as situations in which the rules change and consequences follow. [ I have a mental image of them being dank dungeons with manacles on the wall, and cobwebs hanging from the beams.]  True, that each represents a process that may lead to a change in legal rights, or a loss of property, but they are roadways, not fixed “places.”

The foreclosure process, which by California law, takes a minimum of  four months from formal notice of default to foreclosure sale, is being drawn out these days,  by the action or inaction of the foreclosing creditor.  My assumption is that their systems simply can’t process that many foreclosures and the market can’t absorb that much bank owned property.

Which brings me to my current favorite sermon:  even if it’s inevitable that you lose the house to foreclosure, stay in the property and live payment free until there is actually a sale.  You may be astounded at how long that interval is, how very much longer than the four month legal process.