Difference Between Judicial and Non-Judicial Foreclosure

June 26th, 2008

Judicial Foreclosure

Judicial foreclosures are processed through the court system. The lender files a complaint stating what debt is owed with an explanation of why they should be allowed to recover the property from the borrower in lieu of debt settlement. A notice of Lis Pendens usually accompanies this complaint. A Lis Pendens means a notice of pending action. The home or property owners are notified that there is intent to cure a default by mail and publication to have an opportunity to protect their interest in the court. If the court finds probable cause of default in debt settlement, it is then ordered that the amount owed is valid along with court costs. The property is then to be sold at public auction. When the property is sold, it is then presented in front of the court to protect the lender’s interest.

Non-Judicial Foreclosure

Sometimes Non-Judicial foreclosures are referred to as power of sale foreclosure. This procedure does not involve the court. The mortgage company sends a notice of default or a right to cure default and files a recording in the county recorders office. Often local publications are used along with these proceedings. There are some states that do not require a notice of default and can proceed without any direct contact with the owner. Most states require a time period for these proceedings and after this lapse the public auction is held and the property is sold to the highest bidder. Homeowners are generally allowed to redeem the property in a process called Statutory Redemption. This time period varies from 30 days to one year, depending on each state law.

Facing a foreclosure is frightening and often times confusing since each state is different. You should not face this alone. Act now to contact your lender to see if you can work out a repayment option to settle the debt. If this isn’t a satisfactory solution, get a foreclosure expert to help you with the foreclosure. There are too many laws and terminology that the common man might not understand. You really need to take a look at your finances to see where your problem lies and be upfront and honest with your lender.

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Arizona Real Estate Contracts and the Statute of Frauds

June 20th, 2008

General principles of Arizona contract law simply require the existence of an offer, acceptance, consideration, and sufficient specificity of the terms in order to have an enforceable contract. This is true whether or not the parties write out the terms and/or sign a written document.

This is not the case when the contract concerns the sale of real property. There, the Statute of Frauds as codified in Arizona (ARS 44-101(6)) demands that contracts for the sale of real property be written and signed in order to be enforceable.

It is important to note, however, that the Arizona courts have consistently held that only the signature of the “party to be charged” is required. In other words, the contract must be signed by the party against whom enforcement is sought but does not necessarily have to be signed by the charging party. For example, a seller of real estate who never signed the sales contract may successfully maintain an action against a buyer who did sign the contract.

The parties to an Arizona real estate contract should also remember that any amendments to the contract must also be written and signed to be enforceable. Because of the requirements of the Statute of Frauds, parties buying or selling real estate in Arizona are advised to demand written confirmation of all the terms and conditions of the real estate transaction. Frequently, agents and brokers may make representations and assurances to buyers and sellers and suggest that a written modification is unnecessary. Buyers and sellers should avoid the temptation to rely upon such assurances and ensure that all important matters are reduced to writing and signed by the other party.

Unfortunately, many Arizona real estate contracts are not written and/or signed and one or more parties find themselves with a need to seek relief from another party. If you find yourself facing such a situation you should consult with an experienced Arizona real estate lawyer as soon as possible to determine whether an exception to the Statute of Frauds might apply, or if some other legal recourse is available.

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Don’t Count on New Foreclosure Laws to Help You Save Your Home - Take Action Now

June 18th, 2008

Lawmakers nationwide are debating on which new laws will most help foreclosure victims. Many different solutions have been presented, such as stopping foreclosures completely for one year, or placing more regulations on subprime mortgage lending. However, once a decision is finally made, there is no guarantee that it will even help existing foreclosure victims. Many laws being recommended are to prevent future foreclosures and will offer no direct relief to homeowners currently in foreclosure.

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Life Insurance Trust

June 17th, 2008

A Life Insurance Trust is simply a document that acts like a very private and secure box into which you place your life insurance policy. Did you know that upon your death the life insurance proceeds will be included in your Estate?

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Abuses of the Takings Clause - Your Home Could Be Next

June 14th, 2008

Your Home could be next: The Wonders of Eminent Domain

In 2005, the City of New London, Connecticut, contacted Suzette Kelo with an offer to purchase her home. Kelo, among other residents who where in the same situation, refused to leave the neighborhood. To acquire the titles of the home(s), the City of New London filed a court action of eminent domain, citing that they needed the land to improve the economy of the area by attracting developers who would create greater tax revenues. After losing the first case, Kelo and the others appealed the case to the U.S. Supreme Court in Kelo v. New London, citing that taking property from one private party and giving it to another isn’t covered under the public use standard set in the Fifth Amendment, 545 U.S. (2005). The result; they lost again and the neighborhood residents were evicted from their homes under the police power of eminent domain. While it is not likely, it’s a fear that every American must live with in the aftermath of Kelo.

Eminent domain is defined by Blacks Law Dictionary as:

“The Inherent power of a governmental entity to take privately owned property, esp. land, and convert it to public use, subject to reasonable compensation for taking” (Garner, 541). A governmental entity (i.e. a regional government) can take your house as long as they intend to use the property for public use and justly compensate you for your home.

But if a government takes property from a private party and gives it to another private party, does that action qualify as public use? Or, perhaps a government creates a regulation that devalues your property, taking it without paying. Have you been justly compensated? The classic legal answer is that it depends. These kinds of questions ultimately are answered by the nine Justices of the U.S. Supreme Court. They decide cases based on two things: the facts and their personal interpretation of the Takings Clause of the Fifth Amendment of The United States Constitution. The definition and application of the law is largely dependent on the ideological makeup and judicial philosophies of the Justices of The U.S. Supreme Court at the time a specific case is decided and also the historical and contemporary meaning of the constitutional clause that they are interpreting. In other words, you could lose your home due to a Justices interpretation of the law.

Historical Perspective

You might ask where this power comes from. The act of seizing property thru eminent domain results from the protective clause, called the “Takings Clause” of the Fifth Amendment which states: “[N]or shall private property be taken for public use, without just compensation” (U.S. Constitution). Interpreted in the context of the period of its drafting, the Fifth Amendment can be seen as a protective clause protects American liberties, but can also restrict them.

This act was developed to prevent the forced quartering of troops, for example, when the British Army forcibly took lodging in American homes during the Revolutionary war of 1775-1783.For our purposes it is more useful however to interpret the clause in context of the Lockean philosophy of protection of property, a view very important to the framers.

John Locke was a seventeenth century English philosopher whose theory of natural rights possessed by all human beings formed a foundation for much of the constitution. In his Second Treatise of Government, Locke proposed the idea that ownership of property and natural rights were inseparable and he also dispelled the theory of the so called divine right of kings in England. In the Second Treatise of Government Locke said:

[talking about man]…[I]t is not without reason, that he seeks out, and is willing to join in society with others, who are already united, or have a mind to unite, for the mutual preservation of their lives, liberties and estates, which I call by the general name, property (Locke, §123). According to Locke, to seize a persons property is to seize their freedoms, and therefore their rights, which is hardly what the framers had in mind.

Obviously, the takings clause was intended to guard against the improper and unjust seizure of property, preserve representative democracy, and therefore, maintain ones natural rights. It should be noted that Locke referred only to white, male, property owners, and excluded women, slaves, and natives from his doctrine. Because of this, they were not considered full enfranchised citizens at the time.

The Takings Clause

The Takings Clause gives where the government its ability to seize property, although it has to compensate the owner as according to the constitution.

A taking occurs when the government takes the property from one private party and gives it to another for a proposed public use or when the government effectively takes a property through regulation, without just compensation.

Just compensation means that if a government wants a property, they have to pay for it. The area where problems arise is when regulation goes too far or in other words greatly devalues a property to the detriment of the owner, thereby government effectively taking the property for its own purpose. The classic case for this concept of devaluation occurred in 1992 with the U.S. Supreme Court case Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The court found for the property owner and let it suffice to say it’s been the standard where the U.S. Supreme Court has protected the homeowner by way of interpreting the takings clause, since Kelo, however, that has all be flipped upside down.

The standard for public use is the one that has been flipped upside down. Before Kelo, to use the power of eminent domain there must be a substantial reason, like a highway, re-zoning, or some other public works project that will benefit the entire community.

U.S. Supreme Court: The Basics

The U.S. Supreme court and inferior courts in general were originally weak institutions of government, probably due to the fact that the Legislative and Executive branches received most of the attention at the Constitutional Convention of 1787. Instead, the U.S. Supreme Court (and with it other courts) gained their power in a very important case called Marbary v. Madison, 5 U.S. 137. Without going into too much detail, this case gave the power to declare a law unconstitutional, a great power indeed.

There are nine members called Justices and to overturn a decision of the lower court there must be a majority consensus on the constitutionality of an issue. Since each Justice gets one vote, it is pivotal that we understand the meaning of the idea of judicial philosophy. All judges generally follow the concept of Stare Decisis, defined as by the Cornell College of Laws Legal Information Institute as “to stand by things decided,” This is the basic rule of respecting previous judges precedent opinion on cases, and while there is variance in degree of application, Judges of both judicial philosophies respect this standard. There are two basic threads of judicial philosophy are called judicial restraint and judicial activism. Restraint means that a Justice reads the Constitution strictly black and white, activism is where a Justice lets their personal beliefs and policies influence their decisions. This is important to know because those who follow restrain are usually defenders of homeowner’s rights and those who follow activism are the opposite. The five Justices that held for New London (against Kelo) were activist Justices.

Kelo V. New London: The earthquake that shook the nation

In 2005, Kelo v. New London shattered the traditional definition of public use in a decision that gave government the power to take (with compensation) property from one private party and give it to another private party 545 U.S. (2005). In this case, the U.S. Supreme court departed from precedent of protecting homeowners and re-invented the concept of public use, essentially protecting governments.

New London, Connecticut was a city in economic distress after losing a military base that was a significant source of employment in the early 2000. As a result, the city needed to attract industry to create jobs. In order to do this, substantial plots of land were to be cleared in certain undesirable areas in order to make way for big business.

Suzette Kelo and other homeowners challenged the action arguing that taking their homes away to increase economic productivity was not something for the public use and transferring property rights from one private party to another was unconstitutional. In an astonishing opinion authored by Justice Stevens (a judicial activist) found that New London had not violated the constitution in its exercise of eminent domain as revitalization of the economy was a legitimate state interest. For better or worse, the effect of this decision is that counties can exercise eminent domain at their will for just about any reason. This has meant the emerging cliché of evicting homeowners of lesser means to make way for housing developments that will lure tax payers with deeper pockets is becoming a reality. You might wonder if Kelo is really such a big deal.

After Shock

Joyce H. Price of the Washington Times wrote an investigative piece called Eminent domain surges after ruling to answer just that question.

In the year since the Kelo decision, nearly 6,000 properties nationwide have been threatened or taken under that precedent, more than half the number that had been seized over a previous five-year period, said a report released yesterday by the Institute for Justice. “There has been a huge rise in the number of threats to use eminent domain since Kelo. Cities are wielding eminent domain as a club,” said Dana Berliner, a senior counsel with the Institute for Justice and the author of the 100-page report. (Price 1)

Eminent domain is a complicated legal topic that ultimately rests in the hand of a select few people, the Justices of the U.S. Supreme Court. Whatever your personal take on the issue, the definition of what constitutes proper exercise of eminent domain has changed and it will affect American, for better or worse.

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How Does an “As Is” Clause Affect an Arizona Home Seller’s Disclosure Obligation?

June 13th, 2008

Arizona law requires sellers to disclose to buyers known material facts which might affect a buyer’s decision to purchase the property. Thus, in addition to their contractual obligations, sellers have a common law duty to disclose to buyers known material facts that might effect a buyer’s decision to purchase the property.

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What to Do About Your Probate Property

June 6th, 2008

Death is the natural process and there is no way you can avoid it. But there are few ways using which you can ease the life of others who are left behind you after your death. You may have accumulated a wealth of real estate and other property in your life now the problem comes when you don’t list your property in your will. It is very important for you to speak to an attorney and consider a living trust, this simple document avoids probate. It makes the hole process much easier and it assures you that your wishes will be respected.

What happen when there is no living trust? It will fall into what is called Probate, the property will be handled by a probate court in your area, the judge will appoint an executor, and will determine who will get what.

Each State has its own legal process of listing probate property and will. When a person, passes away a petition is filed and the County Courthouse and a Personal representative is appointed to handle the case. In the first phase the task of liquidating all the property is performed which follows by clearing all the debts remained in the name of person and distributing all the remaining property left to the relatives and successors. California has it’s own probate legal process.

In most cases inheriting probate property can be a extra burden. There are many state taxes and property taxes implied by state on people who inherit probate property. There can be more costs and fees incurred in the process if the property has to be repaired or requires any mortgages to be paid. Moreover sometime you may inherit property which might be out of state from adding hardship to the process. All in all you do need a Realtor that is familiar not only with the probate process but in local to your property. Do not get fooled into accepting the referees referral you can choose your own Realtor. Interview a few.

A living trust can be a good way to relax the whole process as it can help you determine which property goes to which of your relative. In most cases the owner might want to transfer the power to his closed relative but that person might be living to other city or even to their state so in such a case listing probate property in the will is easiest way to transfer the power to your successor.

Once you have decided upon drafting a living trust you can call your personal representative, send him a letter or simply or call him through the telephone. Let him know about the process and that he will be the executor.

If you are in probate choose an agent that understand the process and is active in the area the property is located. Once it is listed the agent will search for the interested client who might be interested to purchase your property. The agent will send out all the details of the property through the email and will normally add the phrase of “as is” condition in the notice since it will help to reduce the cost of repair or any renovation. Since probated property can come in very bad condition make sure it is priced correctly. It is always advisable to sell the property as is to reduce this cost. Unless you are in an area that you know that a $ 1.00 invested will bring you $ 3.00.

Listing your probate property is easy and simple if you understand the whole process and have the right agent. You need and agent that can refer you to Estate Sale companies in the event these is personal belongings and someone that can put you together with a plumber, painter, electrician if need be.

If you are in Los Angles please call or e-mail us as we will be more than happy to help.

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Using a Quitclaim Deed to Transfer Legal Ownership of a Property to Avoid Foreclosure

June 6th, 2008

One common misconception that homeowners can have during a foreclosure situation is that they can somehow transfer ownership of a property and that this will stop the foreclosure in its tracks. Nothing could be further from the truth, however, and simply signing over the deed to the house to a third party will put the owners in a much more vulnerable situation than when their own names were on the title. Using a quitclaim deed or other transfer document will also do nothing to make the bank end its lawsuit to take the home.

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Public Real Estate Record & How To Get One Quickly And Legally!

June 5th, 2008

A public real estate record can be a realtor’s and a buyer’s best friend. The public real estate record can give the seller and future homeowner information on the house that they may not get otherwise just by looking at it.

Problems – A public real estate record should tell you about certain problems that the house has had such as electrical failure, flooding, or cracking foundation. These are all important and sometimes life threatening problems that every seller and buyer should know about well in advance of buying the home. After all, to the seller, it’s just real estate. To the buyer, it’s a home.

History – When was the house built? What is the history of the land it sits on? How many previous owners have there been? Is there a history of a crime that was committed in the home? Some people may not feel comfortable living a home where someone was murdered or where someone hid out during a crime spree. Some people may not even feel comfortable living in the same neighborhood as a “famous crime house.” These are all very important things that every prospective homeowner should take into account when looking to purchase a home.

Quality – When was the last time the house got painted? Are those the same bricks that were there when the house was built originally? How old are those shingles on the roof? If the quality of the home is not up to par, there is no reason to buy it. Unless of course, you want to buy a fixer upper, this even then could end up as a money pit.

Other – A public real estate record can also show you things like how many mortgages a house has had, tax history, sellers name, property type, location, etc. These are all very important things to take into consideration when looking through a public real estate record.

Remember that not all public real estate records are created equally, as different states may have different requirements for what they each require. Some states, for example, do not have to tell you if there was flood damage at the house or not. Their buyers beware in those states. Do you live in one of those? You had better hope not for you and your family’s safety and security.

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Public Real Estate Record & How To Get One Quickly And Legally!

June 5th, 2008

A public real estate record can be a realtor’s and a buyer’s best friend. The public real estate record can give the seller and future homeowner information on the house that they may not get otherwise just by looking at it.

Problems – A public real estate record should tell you about certain problems that the house has had such as electrical failure, flooding, or cracking foundation. These are all important and sometimes life threatening problems that every seller and buyer should know about well in advance of buying the home. After all, to the seller, it’s just real estate. To the buyer, it’s a home.

History – When was the house built? What is the history of the land it sits on? How many previous owners have there been? Is there a history of a crime that was committed in the home? Some people may not feel comfortable living a home where someone was murdered or where someone hid out during a crime spree. Some people may not even feel comfortable living in the same neighborhood as a “famous crime house.” These are all very important things that every prospective homeowner should take into account when looking to purchase a home.

Quality – When was the last time the house got painted? Are those the same bricks that were there when the house was built originally? How old are those shingles on the roof? If the quality of the home is not up to par, there is no reason to buy it. Unless of course, you want to buy a fixer upper, this even then could end up as a money pit.

Other – A public real estate record can also show you things like how many mortgages a house has had, tax history, sellers name, property type, location, etc. These are all very important things to take into consideration when looking through a public real estate record.

Remember that not all public real estate records are created equally, as different states may have different requirements for what they each require. Some states, for example, do not have to tell you if there was flood damage at the house or not. Their buyers beware in those states. Do you live in one of those? You had better hope not for you and your family’s safety and security.

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