Default Services
In the current economic climate, private money providers need astute, reliable default services, especially in a state like California that provides many legislative protections for borrowers and renters. The ever-changing federal and state statutory framework can create a legislative minefield, however. Our foreclosure affiliate, Sandcastle Trustee Services, keeps abreast of all legislation – in California and nationally
Non-Judicial Foreclosure
The non-judicial foreclosure process is used instead of filing a lawsuit in court to retrieve the amounts owed to a lender with a secured loan under a Deed of Trust. The process follows procedure as set forth in the Civil Code of California. Based on the code, there are specific time frames and costs associated with the process. This makes the non-judicial foreclosure the best economical method for a lender.
Stages of the foreclosure process:
Notice of Default – Reinstatement Period
Foreclosure proceedings start with a Notice of Default (NOD). The document is recorded at the request of the Lender by the trustee and is recorded in the county in which the property is located. The recording of the Notice of Default gives “Constructive Notice” to the public. After the recording of the Notice of Default, in the State of California, the borrower and junior lien holders are given proper notification and the borrower has a certain number of days to bring their account current. This period is referred to as the Reinstatement Period. This time period may vary in other states, and varies between 90-180 days in California, depending on the lien status.
Notice of Trustee Sale
If the borrower does not reinstate their account within the reinstatement period, the lender will authorize and instruct the Trustee to record the Notice of Trustee Sale (NOS).
After 21 days of the recording of the NOS, a foreclosure sale can take place at public auction. The property may be sold to a third party bidder or revert back to the lender for a specified amount.
Bidders are required to bring cashier’s checks or money orders to the sale in an amount equal to or higher than the lenders opening bid. The auctioneer will qualify each bidder and the successful bidder will have to tender full payment at the sale.
The Notice of Trustee Sale is recorded at the County Recorder’s office in the county where the property is located. It contains the date, time, and place where the auction will take place. This notice has to be published in a adjudicated newspaper in the city where the property is located. The NOS is also posted on the property as a requirement of law.
Disbursement of Funds
After the auction is completed, the property will either sell to an outside third party bidder, or revert to the Lender/Beneficiary. In either case, a Trustee's Deed Upon Sale will be issued and any funds resulting from the auction will be prepared for immediate payout.