Archive for the ‘Trustee Sales’ Category
How Does the Foreclosure Process Work?
What are foreclosures? They are the way to get money back when a debt is not paid.
NOD – Notice of Default – The first step to being “in foreclosure” is receiving the notice of default. Missing payment is just getting in default. Foreclosure has not actually begun yet. Until the notice of default is issued, the foreclosure is not issued. Default notices can be issued for reasons other than missed payments, such as having a meth lab or other reasons that violate the terms of the trust deed. The notice of default must be recorded in the county where the property is located.
Reinstatement Period – Lasts 90 days after the NOD to give the homeowner an opportunity to reinstate the loan. This is a statutory requirement that can’t be shortened. It is a built in protection in favor of the homeowner. During this time they can modify a loan, sell it, or get it reinstated.
Notice of Trustee Sale – The Date of the sale is published In a newspaper of general publication three times, once a week for three consecutive weeks. Must occur 10-30 days after the last publication. Must be published publicly at County Court House, on the Property’s Door. The purpose is to make sure the owners are aware, as well as advertise it to potential bidders. It is full of legalize.
Court House Steps Foreclosure Auction – The lender has the opening bid at the amount owed. No money actually changes hands for them. Trustees can postpone these sales for up to 45 days for any reason, like if there is a short sale closing that has a chance of happening that needs to be postponed. After the 45 days, the notice process needs to start over again.
If you bid on a foreclosure auction, and can’t perform, they can sue you for damages of not performing. If you win the bid, then you get a Trustees Deed, a simple deed with no warranties.
Second Liens, Home Owners Association Assessments, are all wiped out. But, Federal Tax liens might not be eliminated if they fail to give notice. If the trustee does give proper notice to the federal government of the upcoming trustee sale, then the Federal Tax Lien is actually wiped away. Property Tax Liens do have to be paid. You will have to pay these off. They are really the only thing a buyer at a trustee sale would be responsible for.
If there are actually excess funds from the bid, then the trustee applys those funds to any junior leins.
You can’t force lenders to foreclose. It’s their decision, their right to foreclose if they want to.
Deficiency Judgements – Lenders can sue the person who they foreclosed on for the actual loss of a foreclosure. To do this, they must sell the property within 90 days, then judicially sue. Chances are the owners are insolvent, and the bank won’t be able to collect anything. Fore these reasons, deficiency judgement are rare. But, it is common to 1099 the foreclosed person, so they are responsible for the amount they were forgiven on their taxes. The junior liens are in a different situation, the have 6 years in which the can go back and sue for the deficiency they lost.