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Can Bankruptcy Prevent Foreclosure?

Many people wonder if filing for bankruptcy will prevent foreclosure on their homes. When you file for bankruptcy, it’s important to ask your bankruptcy attorney to explain all possible ramifications of that action. This prevents unpleasant surprises and helps you to better plan for the future. While banks will often delay foreclosing on a home while your bankruptcy proceeds, they can indeed proceed with foreclosure at any time.

Bankruptcies and Foreclosures

There are two basic ways in which the bank can reclaim your property:

With a “deed in lieu of foreclosure”, you sign over the deed and all interest in the property to the lender. This can be slightly better for your credit than a foreclosure, but not all banks give you the option to proceed in this way.

With an actual foreclosure, the bank may proceed with a  judicial or non-judicial process. With the judicial process, the lender has to go through a court process in order to reclaim the property. In the non-judicial process, the bank can take possession of the property and sell it at auction after proceeding through a specific foreclosure process set forth by the state.

Unfortunately, filing for bankruptcy does not mean you can stop paying for the home and keep it. Many banks will wait until your bankruptcy is complete before starting or continuing with the foreclosure process, so while bankruptcy may play a role in delaying the inevitable, it does not prevent foreclosure altogether.

Until the home is legally possessed by the bank, you still own it.  TO THE SURPRISE OF MANY UNDERWATER HOMEOWNERS, EVEN A SURRENDER IN BANKRUPTCY CANNOT FORCE THE BANK TO RETAKE POSSESSION OF THE HOME. In many cases it is wise to use this time, if you are not still making payments to the bank, to save cash for your eventual move to another residence. It will probably be difficult to purchase a new home for two to three years, and sometimes longer, due to the impact the foreclosure will have on your credit rating. You can, however, bounce back from this unfortunate situation. Talk to your bankruptcy attorney to be sure you have reasonable expectations for the future.

BY: R. TODD FRAHM, ATTORNEY AT LAW

C.A.R. California Economic and Housing Market Update

IMPORTANT NOTICE: Real Estate Exams and COVID-19

The Department of Real Estate (DRE) is cancelling real estate salesperson and broker license exams in all exam centers through April 30, 2020. This action is being taken to comply with state and local public health agencies ordering residents to shelter in place to slow the spread of COVID-19.

Examinees affected by these cancellations will be notified by email and will be allowed to reschedule their canceled exam dates using DRE’s eLicensing system. Exam rescheduling fees will be waived for canceled exams.

Examinees with questions or concerns regarding canceled exams can contact DRE’s Licensing program at (877) 373-4542 or by email at [email protected].

MLS/NAR Clear Cooperation Policy

In this video, CRMLS CEO Art Carter speaks on the NAR Clear Cooperation Policy, what is being done with the feedback received from real estate professionals in our MLS community, and a little about how CRMLS is addressing the policy.

CRMLS welcomes your feedback on Clear Cooperation. Please email them at [email protected] with your thoughts.

Courtside Real Estate: Fair Housing Regulations: Consideration of Criminal History

BY: JOHN V. GIARDINELLI, ATTORNEY AT LAW | OF COUNSEL
CODY J. BELLMEYER, ATTORNEY AT LAW

Under the recently released Fair Housing Regulations (“Regulations”), the Department of Fair Housing and Employment (“DFEH”) clarified what a landlord can consider when screening their potential tenants. These Regulations are incredibly important to both landlords and property managers as they are likely to effect current screening tenants for prospective tenants.

Generally, the Regulations prohibit the use of criminal history Information if the use of information results in a discriminatory effect, amounts to intentional discrimination, constitutes a discriminatory statement, or it otherwise creates a discriminatory practice. Essentially, landlords and property managers cannot establish or maintain an applicant screening process which amounts to a blanket ban against renting to any person with a criminal record and cannot consider any prior arrests which did not lead to a conviction. Criminal history is broadly defined under the regulations as “any record that contains individually identifiable information and describes any aspect of an individual’s criminal history.”

Although landlords cannot use criminal history to discriminate against tenants, the landlord may be able to avail themselves to an exception if they can demonstrate, among other things, that they have not violated the regulations by demonstrating that the landlord has a legally sufficient justification for a practice of seeking or otherwise considering information which has a discriminatory effect. Additionally, nothing in the Regulations prevents landlords from establishing a policy which permits individual assessments of the types of convictions. However, by default, the law prohibits a person from seeking, considering, using, or taking an adverse action based on criminal history information.

While the Fair Housing Regulations establish new laws relating to criminal history information, a person may also be subject to local laws and ordinances which provide additional limitations. If landlords consider the criminal history information for purposes of denying tenants, they should seek counsel or carefully review their local ordinances to determine what restrictions apply to their properties.

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