1. What is a non-judicial foreclosure?
Non-judicial foreclosure of real property is a public auction by the Trustee under a Deed of Trust with a power of sale.
2. What are the advantages of a non-judicial foreclosure?
No judicial involvement • No redemption right of borrower once the foreclosure sale is completed • All junior liens and interest, such as leases, are foreclosed out. Exception is post sale redemption for an IRS lien. They have 120 days to redeem the property where they come in and pay you off and take the property to satisfy their lien • Upon foreclosure, purchaser receives title under a Trustee’s Deed Upon Sale • Advantage to borrower is no deficiency Judgment may be sought after a non-judicial foreclosure
3. What is a Notice of Default?
The Notice contains a statement of the breach under the note. A copy of the recorded Notice of Default is then mailed to the Trustor, any Successor’s in Interest and any junior lien holders and their Assignees. A sale cannot be set for 90 days plus one day from the recording date of the Notice of Default. If residential, owner occupied, first Deed of Trust, you must add 3 additional months before proceeding. This is period is referred to as the “Pre-Publication Period.”
4. What is a Trustee’s Sale Guarantee?
A TSG (Trustee’s Sale Guarantee) is issued for the purposes of the Trustee to process the non–judicial foreclosure. It does not insure the benefit of any other party other than the Trustee. The TSG is NOT a policy of title insurance. It does not insure any parties as to any matters. It does guarantee the following: • The vested owner shown is current and correct
• The names and address of persons who have recorded requests for a copy of the Notice of Default and Notice of Trustee’s Sale • The names and addresses of additional persons who are entitled to receive a copy of the Notice of Trustee’s Sale pursuant to California Civil Code 2924b(c)(3). Sale mailings • The names and address of State taxing agencies which are entitled to receive a copy of the Notice of Trustee’s Sale pursuant to California Civil Code 2924b(c)(3). Sale mailings • Identifies the judicial district in which the property is located, and newspapers adjudicated for the purpose of publishing of the Notice of Trustee’s Sale.
5. What is a Notice of Sale?
After the three–month Pre-Publication period has expired, a Notice of Trustee’s Sale is published, posted and mailed at least 20 days prior to the Sale. If there is an IRS tax lien on the property, we must send a copy of the Notice of Trustee’s Sale to the IRS 25 days before the scheduled sale date. This period is commonly referred to as the “Publication Period” because a copy of the Notice of Trustee’s Sale is published in an adjudicated newspaper of general circulation in the city where the property is located. The notice must be published once a week for 3 consecutive weeks and a copy posted on the property and one public location in the city where the Trustee’s Sale will be conducted. At least 20 days before the Trustee sale date, the original Notice of Trustee’s Sale must be recorded in the county where the property is located. Until 5 business days prior to the sale date, the beneficiary must allow reinstatement, if loan can be reinstated. Within the 5 days period, it is up to the beneficiary as to whether they will accept a reinstatement.
6. What is a Trustee’s Sale?
The Trustee’s Sale is a public auction by the Trustee under the Deed of Trust, pursuant to the non–judicial foreclosure proceedings. • Sales are held in a public place on the date, time and place stated in the Notice of Trustee’s Sale between the hours of 9:00 a.m. and 5:00 p.m. on any business day Monday through Friday. • The beneficiary may open the bid up to the amount of the total debt owed under his Deed of Trust plus foreclosure fees and expenses. • “Funds “ that can be used are cash, cashier’s check drawn on a state or national bank, a check drawn by a state or federal credit union, or a check drawn by a state or federal savings and loan association, savings association, or savings bank specified in Section 5102 of the Financial Code and authorized to do business in this state. • All bidders must qualify with the Auctioneer to bid at the time of sale. • The trustee’s sale is complete when the final bid is accepted. • The successful bidder he gets a receipt at the sale for his money. The Trustee prepares the Trustee’s Deed Upon Sale and is sent to the successful bidder for them to record. • The sale is deemed perfected as of 8:00 a.m. on the day of sale as long as bidder records within 15 days
7. Can the foreclosure sale be postponed?
As of January 1, 2006, C 2924g was amended substantially changing the beneficiary postponements and doing away with the 3 postponement limitation and replaces it with a 365 day limitation from the date set forth on the Notice of Trustee’s Sale before republication is necessary.
8. What does a Trustee do?
Foreclose and Re-convey.
9. Does title need to be the original Trustee on the Deed of Trust to process the foreclosure?
No, Title may be substituted in as Trustee to process the foreclosure.
10. How much will it cost?
The Trustee fee is based on the unpaid principal balance of the Note.
11. How long will the process take?
A California non-judicial foreclosure takes approximately 4 months to complete, unless it is an owner occupied, residential 1st Deed of Trust, then, it could take up to 7 months.
12. Do you have to go to court?
No, this is a non-judicial foreclosure and there are no court appearances.
13. Do you personally have to come into the office to start a foreclosure?
No, you may need to have some documents notarized; however, the foreclosure process may be completed entirely by mail or email.
14. What if you have lost the original Note?
There are remedies for a lost Original Note, contact our Trustee Services Department for details.
15. Can you collect payments from the borrower during the foreclosure process?
It depends.