What is a non-judicial foreclosure?
Non-judicial foreclosure is a private or non court process regulated by the California Civil Code. It allows the sale of the property by a trustee under a deed of trust using the power of sale clause.
How do I start a foreclosure?
To begin, the trustee will need a declaration of default and substitution of trustee along with the original note, deed of trust and any assignments, modifications or extension agreements. In addition, we will need a Declaration of Compliance pursuant to California Civil Code §2923.5.
How long does the foreclosure take?
If no delays occur the typical non-judicial foreclosure takes around four months from the date the Notice of Default was recorded.
Who pays the foreclosure fees and costs?
If the borrower brings the loan current or pays it off, the borrower is responsible to the lender for the foreclosure fees and costs. Since the lender is obligated to pay the trustee, the lender must be wary of foreclosure expenses. If the property is sold at auction to an outside bidder, those fees and costs are usually included in the bid and the expenses will be paid by the bidder. Only when the lender is the successful bidder at the sale will the lender not be able to recover all fees and costs from another party. The lender should remain in constant contact with the Trustee to verify all fees and costs in order to make sure that they issue proper reinstatement and payoff letters.
How are the fees calculated?
The fees are calculated pursuant to the California Civil Code. Advantage has its fee schedule posted on this site. Any further questions regarding fees should be directed to the company.
Who is entitled to received a copy of the Notice of Default?
Within 10 business days after the Notice of Default is recorded, notice must be mailed via regular and certified mail to the original trustors, the current owners and those who have specifically filed and recorded a request for the Notice of Default. Within one month after the Notice of Default is recorded, the Notice of Default must be mailed to any new owner of record and those lienholders with a record interest. These parties and addresses are provided by a title company in a Trustee Sale Guarantee.
Who is entitled to receive the notice of trustee's sale?
The parties to receive said notice are codified in California Civil Code §2924b and b3.
What is a Trustee Sale Guarantee?
A Trustee Sale Guarantee is a search provided by a title company searching the records of the County where the property is located, showing all necessary parties, lienors, senior lienors, encumbrances and covenants and restrictions of record. This document is reviewed by this company and provided to the lender along with notification of any potential title issues that are found of record. If the company finds issues on title senior to the deed of trust being foreclosed, we will request a copy of the prior lender policy and seek immediate clearance of said items on the lender's behalf through the prior insurer.
How long does the publication period last?
After the three month reinstatement period, a notice of trustee's sale is prepared and sent to the required newspaper for publication. The first ad must run at least 20 days before the sale and the notice of sale must be recorded at least 20 days prior to the sale. The Notice of Sale must publish once a week for 3 weeks.
How is the bid calculated?
The lender must determine the principal, interest, disbursements, costs, Trustee's Fees and publication costs in order to determine the amount due at the sale. The lender is not obligated to bid the total amount due. The lender should attempt to determine the actual value of the premises and bid in that range in order to possibly encourage the property being bought by a third party.
Must I attend the sale and bid?
No. The trustee's auctioneer will be able to bid on your behalf. It is imperative that you communicate with your trustee and give clear instructions so that the sale may occur without any issues.
Can I postpone the sale?
Yes. The Trustee can postpone the sale as needed within the first 365 days after the sale is first noticed. After a year of the expiration of the reinstatement period, a sale must additionally be republished.
Should I worry about a senior trust deed beginning foreclosure if I hold a junior lien?
Absolutely! Your interests in the property as a junior could be wiped out by the senior’s trustee sale. It is imperative that you quickly assess the situation and exercise a remedy if there is equity remaining in the property.
Should I reinstate the senior lien being foreclosed or bid at its sale?
Reinstating the senior loan costs the junior lienor less money than bidding at its sale. If the loan has matured, then you may tender the payoff prior to the sale or bid at the sale. If the senior lien filed a notice of default, you can attempt to bid at the sale. If that is your choice, you should bring sufficient certified funds to bid the amount of the debt plus your lien if there is enough equity. You cannot credit bid the amount you are owed and must bring funds like any other bidder. Once the sale is completed, your lien will be extinguished, so be prepared.
Must the original trustee process a non-judicial foreclosure?
No. The beneficiary may substitute trustees at any time. The beneficiary must execute a Substitution of Trustee form appointing Advantage Trustee as the new Trustee to handle the foreclosure process.
What are common delays?
In what states do you conduct foreclosures?
We specialize in California and New York. For more information regarding New York foreclosures, please visit the Advantage Legal website at www.advantagelegal.com.
Did You Know?
Advantage Trustee is part of Advantage Legal, which offers complete auction and posting services in New York. For more information, visit the Advantage Legal website.