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Q: What is a Non-Judicial Foreclosure?
A: Non-judicial foreclosure is a sale by a trustee under a deed of trust, or mortgage under a power of sale. There is no court (judicial) proceeding.
Q: Must the original Trustee process the foreclosure?
A: No. The beneficiary under the deed of trust, can elect to substitute in a new trustee.
Q: When can I initiate a Foreclosure?
A: A foreclosure is initiated when there has been a breach or a default. The breach could be either the borrower failing to pay the note pursuant to terms or a breach of a covenant of the deed of trust, such as delinquent real property taxes or senior lien.
Q: What documents do I need to initiate the Foreclosure?
A: The trustee will need a declaration of default and substitution of trustee completed (see forms page) along with the original note, deed of trust, any assignments, additional notes, modifications or extension agreements. If the original note is lost, then it may be necessary to obtain a lost instrument bond.
Q: As a junior deed of trust holder should I be concerned with a foreclosure being held by the senior deed of trust?
A: YES! As a junior lienholder your interest in the property could be terminated by the senior lienholders trustee's sale. You may either reinstate the loan prior to the senior's trustee's sale, which could require less of a cash outlay than bidding at the senior's foreclosure sale. If their foreclosure is several months ahead of your foreclosure, then it may save time and be beneficial to bid at the trustee's sale to protect your interest. If you do decide to bid at the sale you must have certified funds at the sale sufficient to include the debt of the senior deed of trust plus the amount of your debt.
Q: What is the time frame of a foreclosure?
A: A foreclosure should be completed within four months if there are no delays. The first step is to record a notice of default (NOD) in the County where the property is located. Before a trustee's sale can be scheduled three month's must pass from the recording date of the NOD. After the three month's a trustee's sale date is scheduled in a public place where the county is located. The property must be posted at least 20 days prior to sale and published in an adjudicated newspaper for the property once a week for three weeks, with the first publication to be at least 30 days prior to sale. Also if there is an IRS lien recorded against the property they at least 25 days prior to the sale.
Q: What happens when the borrower files a bankruptcy?
A: When the borrower files a bankruptcy an "automatic stay" prohibits the Trustee to continue with the foreclosure. It is very important to retain legal counsel to protect your interest and obtain "Relief from Stay" in order to proceed.
PLEASE NOTE: THIS SECTION OF THE WEBSITE DOES NOT PROMOTE LEGAL ADVICE. THE INFORMATION ABOVE IS FOR INFORMATIONAL PURPOSES ONLY, AND SHOULD NOT BE CONSTRUED AS LEGAL ADVICE OR LEGAL OPINIONS. AS ALWAYS YOU SHOULD SEEK PROFESSIONAL COUNSEL FOR YOUR SPECIFIC SITUATION.
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