Facing Foreclosure?
You Have More Power
Than You Think.

Here's a fact that surprises almost every homeowner I speak with who is facing foreclosure: you probably have significant equity in your home. According to the Consumer Financial Protection Bureau, the majority of homeowners who are behind on their mortgage still have enough equity that a traditional sale would be a better outcome than foreclosure.

Let me put this in real numbers. If you bought a home in Simi Valley five or six years ago for $550,000, that home may now be worth $750,000 or more. Even if you still owe $480,000 on the mortgage and you're six months behind on payments (roughly $18,000 in arrears), you could sell the home, pay off everything you owe, cover all closing costs, and walk away with over $200,000 in your pocket.

Now compare that to what happens in foreclosure.

When a home goes to foreclosure auction, several things erode your equity. First, attorney and trustee fees accumulate, averaging $12,500 according to industry data. Then there are title costs, recording fees, and administrative expenses. But the biggest loss comes from the sale price itself. Auction properties routinely sell for 15% to 30% below market value because buyers demand a discount for the risk and uncertainty of buying at auction.

So that $750,000 home? It might sell at auction for $575,000. After the lender takes what it's owed ($480,000 plus $18,000 in arrears plus $12,500 in fees), there might be $64,500 left. And many homeowners never claim those surplus funds because they don't know they're entitled to them.

What the Experts Say

Rick Sharga, one of the nation's foremost foreclosure data experts, has emphasized repeatedly that today's homeowners are in a fundamentally different position than those during the 2008 crisis. Most have substantial equity buffers. The key, according to Sharga, is to watch local market conditions and talk to your mortgage provider early. "You may have more options than you think," Sharga has said.

The CFPB echoes this guidance: "For many struggling mortgage borrowers with home equity, selling their home could be an alternative to foreclosure." They specifically note that a traditional sale where the mortgage is paid in full leaves your credit largely intact, compared to the 7 year scar of a foreclosure on your credit report.

What You Should Do Right Now

Call me at (805) 304 5589 for a free, confidential market analysis of your home. I'll tell you exactly what your home is worth today, how much equity you have, and what your net proceeds would be if you sold. This costs you nothing and obligates you to nothing. But it gives you the single most important number in this entire equation: what your home equity is actually worth.

If you've received a Notice of Default or a Notice of Trustee Sale, your first instinct might be to freeze. That's natural. But freezing is the most expensive thing you can do. Every day that passes reduces your options and your negotiating power. The single most financially advantageous move you can make is to sell your home on the open market before it reaches auction.

The Numbers Don't Lie

A home sold on the open market typically achieves full market value because it's exposed to the largest pool of buyers, it's properly marketed, and buyers can finance the purchase with a conventional mortgage. An auction sale, by contrast, often attracts only cash investors who expect a significant discount.

Your Credit Score: The Hidden Cost

Beyond the financial loss, a foreclosure stays on your credit report for 7 years and can drop your score by 150 or more points. A traditional sale where the mortgage is paid in full has essentially zero impact on your credit. This affects everything: your ability to rent an apartment, your car insurance rates, your future borrowing costs, and even some employment screenings.

The 45 Day Listing Agreement Strategy

California law provides a powerful tool that many homeowners don't know about. If you submit a valid listing agreement with a California licensed real estate broker to the foreclosure trustee at least 5 business days before your scheduled auction, the trustee is required by law to postpone the sale for at least 45 days.

This means even if your auction is days away, signing a listing agreement with me can buy you 45 more days to sell your home on the open market, preserve your equity, and protect your credit. This is not a theoretical strategy. It is codified in California law and I have helped homeowners use it.

What You Should Do

If you're anywhere in the foreclosure timeline, from your first missed payment to the week before your auction, call me at (805) 304 5589. I'll give you a free market analysis, explain your options, and if selling makes sense, we'll move fast. My goal is simple: put the maximum amount of money in your hands and protect your future.

A loan modification is a permanent change to your mortgage terms that makes your monthly payment affordable again. It's the preferred first option for most homeowners who want to keep their home, and it's also what your lender prefers because foreclosure is expensive for them too.

What a Loan Modification Can Change

Your lender may agree to one or more of the following: lower your interest rate, extend the term of your loan (from 20 years remaining to 40, for example), defer a portion of the principal balance to the end of the loan (a "partial claim"), or in rare cases, reduce the principal balance entirely. The result is a lower monthly payment that reflects your current financial reality.

The Hardship Package: Getting It Right

Every loan modification starts with a loss mitigation application, commonly called a hardship package. This typically includes a completed application form, a hardship letter explaining your situation, proof of income (pay stubs, tax returns, bank statements), a monthly budget worksheet, and any supporting documentation for your hardship (medical bills, layoff notice, divorce decree, etc.).

The Dual Tracking Protection

Under California's Homeowner Bill of Rights, once you submit a complete loss mitigation application, your lender is legally prohibited from advancing the foreclosure while your application is being reviewed. This is called the "dual tracking" prohibition and it's one of the most important protections you have. If your lender violates this, they may be liable for damages.

What Brian Can Do For You

While I'm not an attorney, I can help you understand the process, review your financial situation, connect you with a HUD approved housing counselor, and make sure you understand all of your options, not just the modification. If a modification doesn't work out, I'll help you evaluate the next best path, whether that's a sale, a short sale, or another alternative. Call me at (805) 304 5589.

When you're facing foreclosure, you're vulnerable. Scammers know this. They monitor public foreclosure filings and target homeowners with urgent, too good to be true offers. The FBI, FTC, and HUD have all issued warnings about foreclosure rescue fraud. Here are the most common scams and exactly how to protect yourself.

The "Foreclosure Rescue" Deed Transfer

A stranger contacts you (often by mail or door knock) and claims they can save your home. They ask you to sign over the deed "temporarily" to a straw buyer with better credit who will refinance the home and transfer it back to you. In reality, the scammer takes out a new mortgage far in excess of what you owe, pockets the equity, and leaves you with nothing. You've lost your home and your equity.

Equity Stripping

An investor offers to buy your home and lease it back to you, promising you can buy it back later. They pay you a small fraction of your equity, take ownership, and either raise the rent until you can't afford it or simply sell the property. You lose the home and the vast majority of your equity. This scheme specifically targets homeowners who don't realize how much equity they have.

Upfront Fee Modification Scams

A company promises to get your loan modified with "guaranteed" lower rates and demands a substantial upfront fee (often $1,500 to $5,000). They may even tell you to stop making mortgage payments and stop communicating with your lender. In reality, only your mortgage servicer can approve a modification. No third party can guarantee approval. And stopping payments while paying a scammer accelerates your path to foreclosure.

Rent Payment Interception

A scammer convinces you to deed the property and make "rent" payments to them instead of your mortgage company, claiming they'll handle the mortgage. The rent payments never reach the lender. You get evicted. The scammer pockets the money.

How to Protect Yourself

Never sign documents without reading them fully and preferably having them reviewed by an attorney. Never pay upfront fees for loan modification help (free help is available through HUD counselors). Never deed your property to anyone without legal counsel. Report suspicious contacts to the FTC, your state Attorney General, and HUD. And call me at (805) 304 5589 for a free, honest assessment before you engage with anyone making promises about your home.

If foreclosure has already happened, or if it turns out to be unavoidable, this is not the end. Millions of Americans have been through foreclosure and rebuilt their financial lives. Here's what you need to know about the timeline and the practical steps you can take.

The Credit Impact Timeline

A foreclosure stays on your credit report for 7 years from the date of the first missed payment that led to the foreclosure. The credit score impact is typically 100 to 160 points. However, the impact diminishes over time, especially in the first 2 to 3 years after the event.

When Can You Buy a Home Again?

The waiting period to obtain a new mortgage after foreclosure depends on the loan type. Conventional loans (Fannie Mae/Freddie Mac) typically require a 7 year waiting period, though this can be reduced to 3 years with documented extenuating circumstances and a larger down payment. FHA loans have a 3 year waiting period. VA loans have a 2 year waiting period. USDA loans have a 3 year waiting period.

Steps to Rebuild

Start with a secured credit card and use it responsibly (under 30% of the limit, paid in full monthly). Check your credit reports at annualcreditreport.com for errors and dispute any inaccuracies. Build an emergency fund. Keep all other accounts (rent, utilities, car payments) current. Consider working with a nonprofit credit counseling agency. And when you're ready to explore homeownership again, call me. I'll help you understand your options and connect you with lenders who specialize in second chance financing.

If your home has already been sold at a foreclosure auction, there may be money waiting for you that you don't know about. When a property sells at a trustee sale for more than what was owed on the mortgage (plus fees and costs), the excess is called "surplus funds." Under California law, you are entitled to those funds.

How Surplus Funds Work

After the auction, the trustee pays off the foreclosing lender's debt (principal, interest, fees, and costs). If there's money left over, any junior lien holders (second mortgages, tax liens, judgment creditors) get paid next. After all creditors are satisfied, the remaining surplus belongs to you, the former homeowner.

The Claims Process

The trustee has 30 days from the auction date to notify all interested parties of the potential surplus funds. You then have 30 days from that notification to assert your claim. If there is no dispute, the trustee must pay out the surplus within 30 days after the claim period ends. Total timeline: roughly 60 to 90 days from the auction date.

If You Miss the Deadline

If the trustee cannot determine who gets the funds or if there's a dispute, they must deposit the funds with the court. You may still be able to claim them, but you may need an attorney to help navigate the court process.

If your home was recently sold at auction and you're not sure whether surplus funds exist, call me at (805) 304 5589. I can help you find out and connect you with the right resources to claim what's yours.