Cambria foreclosure notices have been rising and it was reported that in August of this year that one out of every 295 homes received a foreclosure notice. Central Coast foreclosure notice rates and numbers vary but what does this really mean for you as a home owner?

Foreclosure is the legal process by which the bank or lender can recover the amount owed on a loan that was secured by real estate. This can be by repossession or by sale of the property. The process starts when a borrower defaults on a loan, normally by missing mortgage payments. Normally after the loan payment is 30 days late the lender will record a public notice of default in the form of a ‘Notice of Default’ or ‘Lis Pendens’. This portion of the process is also known as pre-foreclosure.

Central Coast foreclosures can then be remedied in one of the following ways:

1. The borrower or homeowner can halt the process by paying the default amount and reinstating the loan during the grace period.
2. The homeowner can sell the property to a third party and pay off the debt, which can help save them from further damaging their credit history or incurring more costs.
3. The property may be sold at the end of this grace period at auction and the debt may be paid off. However deficiency judgements can be issued if the property does not get sold for a price high enough to cover the debt and costs.
4. Or the lender may take ownership of the property with intent to resell often through an agreement with the borrower.

During this process Central Coast foreclosures offer great opportunities to investors. There are several ways and points in this process that these properties can be purchased at a varying discounts.

During the pre-foreclosure phase the home owner can be dealt with directly and given the chance to save their credit from further damage and possibly walk away with something to show for their equity. Also during this current market a short sale agreement may be able to be negotiated with the bank where the bank will accept less than what is owed on the property.


During the second phase Cambria foreclosures and others in the Central Coast area may be purchased by investors or other buyers at auction. This phase can provide the steepest discounts, but buyers are often required to pay cash at the auction and do not have much time to do due diligence on the property.


Lastly, Central Coast bank owned properties also known as REO (real estate owned) can be purchased from the lender or bank after they have been repossessed.


Another point to keep in mind is that effective this year a new California law amending the home foreclosure process was enacted extending the 3 month grace period by an extra 90 days. However many consumer advocates fear that there are too many loopholes in the law and that lenders may find ways to circumvent it thus not effectively slowing the rate of Central Coast foreclosures.