What is a homestead exemption in a foreclosure?

A homestead exemption in a foreclosure is a form of financial protection for homeowners in California. It allows certain homeowners to keep their home and a portion of their equity if they are unable to continue making payments on their home loan. Under California law, a residential homeowner is eligible to receive a homestead exemption if they are over the age of 65, severely disabled, or a veteran. If a homeowner qualifies, they can keep up to $175,000 of their home’s equity to pay for other debts or use for other purposes. For example, if a homeowner’s home is worth $400,000 and their loan balance is $225,000, they are able to keep up to $175,000 of their equity. In order to qualify for the homestead exemption in California, homeowners must provide certain documentation such as proof of age, disability, or veteran status. They must also file a Homestead Exemption Declaration with their County Assessor. Once approved, the homeowner’s property is protected against foreclosure and creditors would not be able to seize the property or the equity stated in the exemption. In California, the homestead exemption provides homeowners with some financial security in the face of foreclosure. It is a legal protection that allows certain homeowners to keep their home and up to $175,000 of their equity even if they are unable to make payments on their home loan.

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What is a homestead exemption in a foreclosure?

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