How does probate affect a trustee sale?


#1

Property set for trustee sale in a few days. Two owners on title, one owner passed away the remaining owner basically in name only, never paid mortgage and lender won’t talk to him. I have heard that it is now in probate. How does this affect the trustee sale? If it goes up for auction and I am the winning bidder would sale get rescinded due to probate?


#2

Probate is the legal process (affidavits of debts/domicile, letters testamentary, court approval, etc) of retitling assets from the name of the deceased into the name of the estate. If the property had been held in a living trust or as joint tenants with rights of survivorship (JTWROS), then their would be no issue with probate. But if “probate” has come up, the property might have been held as tenants in common (TIC) or in some other co-ownership manner. This would place the decedent’s share of the property into probate (clearing probate can take many months depending on the complexity of the estate). But all of this is moot concerning a forthcoming trustee sale. Death or no, the lender has a right to foreclose if the loan has been in default and they’re not receiving mortgage payments. The executor of the estate would be the party obligated bring the loan current. However, I’m surprised and skeptical that the lender would not “talk to” a co-owner as they are on title and as such can show that they are a pertinent party. Perhaps they won’t “negotiate” with the co-owner who may be looking for a loan mod?

I have seen several cases where the bank has foreclosed (trustee sale - property auctioned and sold) only a few days following the death of the owner.


#3

I have a client who purchased the property with pending probate court. IN Trustes Sale, Probate does not have any case and like Sean stated lender has right to foreclose. My client was able to get the deed and it was a smooth deal.

PS> only one thing. He had little delay in eviction part because of eviction court had to review case of the probate court. But after realizing probate has nothing to do with the foreclosure(trustee sale), he was able to evict them… Thank you.

THis is a real case in last 6months in S california. Thankyou.