The trustee sale is where foreclosed homes are sold. For homeowners, this sale could be the final death knell of your current home ownership. For investors or other home buyers, however, the trustee sale could be a place for great bargains.
Foreclosure is a legal procedure to collect the delinquent balance of a mortgage loan by forcing a sale of the home securing the loan. When a borrower takes out a mortgage loan secured by a home, the borrower gives the lender a security interest in the home. Based on this security interest, a lender can take back a home if a borrower defaults on mortgage payments and use the proceeds of the home sale to pay the delinquent balance. The forced sale of the home may be conducted by the court under judicial foreclosure or by the mortgage lender under nonjudicial foreclosure. The actual home sale process in California is referred to as the trustee sale.
Nonjudicial Foreclosure in California
California favors nonjudicial foreclosure. Under a nonjudicial foreclosure, the lender uses its power of sale to sell a home secured by a delinquent mortgage in order to cure the delinquency. The court is not involved in a nonjudicial sale. Both the power of sale and the nonjudicial foreclosure are typically written into the deed of trust document. The deed of trust establishes a mortgage on the home. The deed of trust is so named because a trustee holds the deed to your home until your mortgage is paid off. When your mortgage falls delinquent, it is this trustee that conducts the sale of your home to recoup the delinquent mortgage balance.
Trustee sales follow strict rules. The sale must occur between 9AM and 5PM on a business day and is held in an auction format led by an auctioneer. Bidders for foreclosed homes must be able to pay the full amount of their bid in cash or a cashier’s check on the day of the sale. The auctioneer qualifies bidders prior to the sale to ensure they have the money to back up their bids. Trustee sales do not permit home inspections by bidders – the bidders buy “as-is.” Once a home is sold at a trustee sale, all liens attached to the home, except for property taxes, go away and the buyer takes the home free and clear. If people are still living in the home, the buyer must initiate eviction proceedings to get them out of the home.
Riverside and Corona attorney, the McAndrew Law Firm, specializes in real estate law. Lead attorney, Richard McAndrew, has practiced real estate law for over 11 years. He is a member of the California Bar Association, Riverside County Bar Association, and San Bernardino Bar Association. Mr. McAndrew has helped hundreds of clients just like you conduct real estate transactions or know and assert their rights regarding real estate. Let the McAndrew Law Firm take a look at your real estate interests and offer counsel on your rights under real estate law. Contact the McAndrew Law Firm today for a free initial consultation.