Is there any potential consequence of one missing letter in the first name of one owner (where the owners are a married couple) in the Notice of Default (NOD) and Notice of Trustee Sale (NTS), where the correct name was in the Deed of Trust? Has anyone here dealt with any similar situation? Should it matter which version of the name is stated in the Trustee’s Deed Upon Sale (TDUS), and could this have any impact on a 3rd party buyer?
I’ve also seen examples of the following:
- A trustee adding or dropping a letter in one instance of its own name in a Trustee’s Deed Upon Sale.
- A missing or extra letter in the trustee’s name printed on a cashier’s check used for payment at auction.
I’d like to understand how important any such errors might be, or any typo in any document (e.g., DOT, NOD, NTS, TDUS), especially in any part of the legal description, e.g., in a recording date or a document, book, page, or map number. For any important errors, how and when can they be corrected (e.g., what if a TDUS or other document has already been issued and/or recorded)?
Although it would be unlikely that a sale would be rescinded based on a typo on the Notice of Default it is certainly something that could be claimed as a potential reason to overturn the sale. Courts can be somewhat inconsistent when ruling on these matters.
Thanks Michelle. I’d greatly appreciate it if any of these questions can be answered easily (even if many cannot be answered):
- Any suggested case law in CA regarding this kind of typo?
- Would it matter even if the owners had actual notice of the documents (and didn’t object prior to the sale)?
- Could an owner gain anything other than rescission of the sale, forcing everything to start from an NOD again, and would an owner’s legal fees be recoverable?
- At what point would any challenge to the sale be completely barred?
- What is the worst case outcome for a 3rd party buyer, and does it matter how the property has been improved or used (e.g., flipped or rented or used as the buyer’s residence)?
- Is there any potential liability for the trustee who made the mistake on the documents, and if so, to whom?
- Would a challenge be more difficult because the other spouse’s name was printed correctly (as compared to the case of just one owner)? Would only one spouse have any possible standing to challenge the sale?
Basically the Notice of Default is really recording a default against a recorded Deed of Trust. So, it is important that everything regarding the Deed of Trust reference is accurate. That would mean that it needs to be absolutely accurate regarding the Deed of Trust, recording date, recorded number, trustee of Deed of Trust, etc. Also, the APN and legal description have to be accurate, but mostly the legal description is the bottom line.
From there, the Deed of Trust has to be accurate. It has to have accurate legal description of property, signed by borrower, and for title purposes, should have the accurate Assessor Parcel Number (because title companies and Recorder use this for indexing)
You can get into trouble if the title companies do not have everything indexed to each other. A typo in a name somewhere along the line is very similar to a missing middle initial or something. As long as the legal references (recorded docs and legal description) are indexed, there probably is no cause for reversal. However, check with the title company to make sure that all the docs are connected and you can get title insurance on a purchase. Then, for this case you should probably buy title insurance right after a purchase.
GJ, thanks very much for your comments. So what could/should happen if the description of the DOT in the NOD (and also the NTS) is accurate in every way except it’s missing one letter of the first name of Spouse 1 as printed in the DOT, but the name of Spouse 1 with spelling exactly matching the DOT is also at the top of an attachment to the NOD containing a declaration pursuant to CC 2923.5(b)? Would it matter whether the TDUS’s description of the DOT used the spelling in the NOD and NTS or the spelling in the original DOT?
Am I understanding correctly that any standard title policy purchased by the auction buyer after the auction would protect that auction buyer against any losses relating to any name typo in any of the foreclosure documents (NOD, NTS, TDUS)?
I have a hard time believing that such clerical mistakes will provide sufficient means for reversal of foreclosures. Who knows, though.
In case it matters for the questions above, the same first name typo in the NOD and NTS was also in these two other documents: (1) Assignment of Deed of Trust, (2) Substitution of Trustee.
There is a legal term that covers such meaningless errors:
Here is a legal definition: (Google is your friend)
Main Entry: de minimis
Part of Speech: adj
Definition: so small or minimal in difference that it does not matter or the law does not take it into consideration
Etymology: Latin ‘of minimum importance, trifling’
Thanks Miketh!! This is my all time favorite post!!
Miketh, thanks for your input. I hope you’re right that such typos would be considered “meaningless” and “so small or minimal” that “the law does not take it into consideration”. They certainly seem trivial to me, but I was unclear how a court would view them, since I’m aware of other situations (not in the context of foreclosures, where I have limited experience) in which such seemingly trivial typos can be legally important.
I was hoping for replies like Miketh’s unequivocally confirming that such typos are irrelevant to courts (and that is what would seem reasonable to me). However, some other replies seemed to suggest that is not always true, e.g., Michelle replied that although such a typo would be “unlikely” to result in a rescission, it could certainly be the basis for such a request and courts “can be somewhat inconsistent when ruling on these matters”. I understood this to mean that courts usually wouldn’t overturn a sale for this reason, but sometimes they would. GJ also apparently felt this issue presented risk that could justify his suggesting insurance: “That would mean it needs to be absolutely accurate regarding the Deed of Trust … for this case you should probably buy title insurance right after a purchase.”
Yesterday on another thread, Michelle posted a very interesting comment that borrowers sometimes sign documents in their original loan package specifically authorizing the later correction of typos. The existence of such agreements implies that otherwise (i.e., in their absence) typos would not always be legally meaningless. If the borrowers signed such an agreement covering the applicable documents, that could settle the issue. Presumably, a 3rd party buyer can probably only find this out by asking the trustee?
By the way, I know of at least one CA case that actually reached an appellate court where an owner’s name typo in the NOD was an issue, but I don’t know yet how much other CA case law exists.
Michelle, after your comment that Miketh’s post is your “all time favorite”, I’m confused whether you now also share his opinion (which I understand to be that such typos would clearly be viewed as irrelevant by a court, even without any agreement covering typos), or whether you still believe that courts can be inconsistent on such rulings. Thanks again for your thoughts.
HI LS, His post made me laugh. I stand by my original comments. That said Miketh is one of the most experienced and knowledgeable auction investors out there.