I’ve been told that certain trustees require that the cashier’s check be written out to the trustee instead of having it written out to your own name. Is there a list of trustees that have this requirement? Would I call the individual trustees for this info?
Every trustee wants cashiers checks to (ultimately) be made payable to the trustee … and that’s most often accomplished simply by endorsing the check and making it payable to the trustee. You can come to an auction with a check made payable directly to a specific trustee, but that, of course, limits you to bidding only on that trustee’s properties.
If trustees mandated that cashiers checks be made payable to the trustee ahead of time, that would only serve to cutdown the pool of potential bidders and hence potentially result in a lower sales price for the trustee … seems counter-intuitive. Most trustee sale veterans will have checks made payable to themselves and simply endorse over to the trustee if they are the winning bidder. Gives investors much more flexibility as opportunities can come and go in a flash. But something new crops up everyday, so perhaps someone knows more about this scenario?
Thanks Danny, I remember hearing that from an auctioneer once and when I looked up Recontrust’s website it stated that checks should be made out to Recontrust so I thought I’d ask here. I agree it doesn’t sound logical but didn’t want to end up w/ checks I couldn’t use at the auction.
A HA!! Many years ago, probably before you were born, there were Trustee’s that tried to, in effect, discourage bidding by requiring checks be made out in extraordinary ways.
This was resolved in: Baron v. Colonial Mortgage Service Co. (1980) 111 Cal. App. 3d 316 [168 Cal.Rptr. 450] You can read the entire decision online. Just Google “Baron v. Colonial”
Since that time, all Trustee’s have accepted checks made out to the bidder and then endorsed to the Trustee. Disclaimer: I was personally involved w. that case.
If you run into a Trustee that doesn’t follow the rules, please post something here. With 10-20 different Trustees holding sales on a given day, it would be physically impossible to show up with a cashier’s check with all possible names on them.
This was a state appellate Court ruling. Since it was a published decision, it has the effect of law since it hasn’t been overturned. It would not have any effect outside Ca. I do know, in practice, Trustee’s in Wa. follow this rule. Don’t know about other States
Miketh, thanks for the explanation!