Legal Question in Real Estate Law in California

Re: Sell property before foreclosure.....

You have every right to sell the property, you even have the right to "redeem" the property by paying all the past due payments up to a few days before the foreclosure sale.

Foreclosure takes a minimum of 4 months. The lender must record a Notice of Default and that starts a 90-day hold period. After 90 days expires, the lender can file a Notice of Sale and you must receive at least 20 days notice of the sale. During this time, you can try to negotiate with the lender, find another lender to refinance to a lower rate or sell the property. As a last resort, you might consider a Chapter 13 Bankruptcy to stop the foreclosure while you try to sort things out.

Re: Sell property before foreclosure.....

You didn't say whether you'd received a Notice of Default yet. As Mr. Starrett points out, you have a minimum of just under four months between the Notice of Default and the foreclosure sale.

I wonder why you're paying 10% interest on a first deed of trust with 50% debt-to-equity ratio. Are there seconds or other liens on the property? Unless there is some unusual situation such as a cloud on title or liens other that your first, you should be able to save a bundle by refinancing. You could pay off the first, including the arrearages, then have a much lower payment. Even if your credit is bad, which it probably is due to the late payments, you should be able to refinance at a much lower interest rate.

If there's some reason you can't refinance, you can certainly sell, but I'd act fast and also do your best to work with the lender. If they know the property is on the market, they'll foresee being paid off from the sale proceeds and will be less likely to foreclose.

There are some "loan to own" lenders that would love to foreclose and buy a property "on the cheap" who would not give you enough slack to sell and pay off -- but these are pretty much in the minority.