By Kelley Atherton

Triplicate staff writer

There's a lot of talk of foreclosures in the news nowadays. Governor Arnold Schwarzeneg-ger has promised aid to those facing foreclosure on their doorstep and President George W. Bush said he will freeze mortgage interest rates. Foreclosures can be tricky, but there are ways to avoid ruining one's credit.

Currently, there are 105,357 properties in pre-foreclosure and 31,105 in foreclosure in California. In Del Norte County, there are 20 properties in pre-foreclosure and zero in foreclosure.

In November, Schwarzeneg-ger launched a $1.2 million public awareness campaign. It's funded through the Business, Transportation and Housing Agency and the State and Consumer Services Agency to help homeowners avoid losing their homes.

He also announced an agreement with four loan service companies, Countrywide, GMAC, Litton and HomEq, to keep subprime mortgages at their initial interest rates. To qualify homeowners must be living in their homes, making timely payments and can prove they won't be able to afford their mortgage once it jumps to a higher rate. Some half a million Californians' subprime mortgages will jump to a higher rate in the next two years.

Bush also made an agreement with major mortgage companies to freeze subprime interest rates for the next five years. Homeowners who got an adjustable-rate subprime mortgage between Jan. 1, 2005 and July 31, 2007, and face a jump in rates before July 31, 2010 are eligible.

What is foreclosure?

The foreclosure process starts when the owner/borrower defaults on a loan payment (mortgage payment) and the lender files a default notice. Foreclosure allows the lender to recover an amount owed on a defaulted loan by repossessing the property secured by the loan. Pre-foreclosure means the lender has not yet taken possession of the property.

What happens at the end of the pre-foreclosure period?

If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction.

What does California State Law say?

In California, foreclosures are settled in and out of court. Court settlements only occur if the lender requests a deficiency judgement. This gives the borrow up to a year to redeem the property after the sale.

Most foreclosures are settled out of court. The process lasts 117 days. The lender must wait three months after the default notice is filed to schedule the sale. The borrower then has up to five days before the date of auction to pay the default amount and additional costs to stop the foreclosure process.

The notice of sale must have the date, time, and location of the sale, the property address, and the trustee's contract information. It is mailed to the borrower and posted on the property and in one public place 20 days before the sale. It also must be published once a week for three weeks in the local paper at least 20 days beforehand. Lastly, the notice has to recorded by the county recorder only 14 days before the sale. Once the sale is complete, the borrower does not have the right to try and redeem the property.

How to end a foreclosure

?The borrower pays off the default amount during the pre-foreclosure period, reinstating the loan.

?The borrower sells the property to a third party during the pre-foreclosure period. The money from the sale can pay off the loan amount without putting a foreclosure blemish on his or her credit history.

?A third party purchases the property at the public sale at the end of the pre-foreclosure period.

?The lender takes possession of the property with the intent to resell it. The lender can also take ownership through an agreement with the borrower or by buying it back at the public sale.

?The andquot;Hope Hotlineandquot; at 1-888-995-HOPE or www. provides mortgage advice 24 hours a day, seven days a week.

?The Web site www. and the Spanish language version can help prospective homebuyers with mortgage questions or homeowners struggling to make payments.

*Source: RealtyTrak, an online real estate marketplace and foreclosure database at

Reach Kelley Atherton at