Foreclosures in Sacramento, CA

Ever since the financial collapse of 2008, the housing and mortgage market of the Sacramento Area has taken a dive.  Similar to Clark County in Nevada, and Maricopa County in Arizona; Sacramento and surrounding area has taken many hits in the real estate market.

Ever since 2008, foreclosures in Sacramento County has risen tremendously. According to a 2008 article by Forbes Magazine, the number of homes with negative equity over $100,000 was 154, and 618 for negative equity between $50,000 to $99,999. Because of drop in home values in the Sacramento metro area, 26.7% of foreclosures had negative equity attached.

Now, a few years later, investors are looking at foreclosed properties as solid investments. Sacramento has many neighboring cities that offer great properties including Folsom, Roseville, Elk Grove and others. Because of the decline of home values, the opportunities to pick up houses at pre-financial-crisis prices is readily available.

Types of Foreclosures

There are two notable types of foreclosures: Foreclosure by judicial sale and Foreclosure by Power of Sale (also known as nonjudicial foreclosure).

Foreclosure by Judicial Sale is when the sale of a mortgaged property is under the supervision of a court. This form of foreclosure is available in every state and some states may require it. The sale proceeds first go to satisfy the mortgage, then other lien holders, and, finally, the loan borrower, assuming proceeds are left. This type of foreclosure is when the lender initiates the foreclosure by filing a lawsuit against the borrower.

Foreclosure by Power of Sale is a faster foreclosure process that bypasses the courts and is common in California. The process begins by conducting a public auction, the highest bidder at the auction becomes the new owner. Free and clear of interest of the former owner, but possibly encumbered by liens superior to the foreclosed mortgage.