The house in default is for a $250,000 loan recorded in 2016. Property Radar says that the foreclosing loan position is the 1st loan. I doubt it.
A $240,000 loan recorded in 2012 which does not have a reconveyance document. The Lender of this loan is Alliance Credit Union.
The trust of deed of the 12/20/2016 loan is a Revolving Credit Deed of Trust. It is related to the 2012 loan. Below are two clips from the 2016 Revolving Credit Deed of Trust. I don’t understand.
The Borrower is T.D. Services.
The beneficiary is Alliance Credit Union, the 2012 loan Lender.
Is the 2016 loan a second loan or an equity of credit? Do I need to pay for the 2012 loan?
The owner also has an $60,000 abstract of judgement - civil and small claims recorded in 2025. The Plaintiff is 1st United Credit Union. I don’t know more information about this judgement. Am I responsible for this judgement?
Note that PropertyRadar never “says foreclosing loan position is the 1st loan,” instead we make it very clear that we ESTIMATE those positions, and that you should not rely on that estimate.
It is unusual to see a HELOC for more than the first without the first being paid off, which is likely why we estimated that the newer loan paid off the older loan. And even without a reconveyance that is still possible, though I agree in this case the later loan is more likely a second.
The borrower is not T.D. Services, they are the trustee. The borrower is cutoff in the image you attached and would be before (herein “Borrower”).
I don’t see why you are saying the second is “related” to the 2012 loan. You have attached a Request for Notice, but that does not mean the loans are related, instead it is just a safety that second puts in place to make sure they get notified before a senior loan forecloses.
As to your questions:
Is the 2016 loan a second loan or an equity of credit? It is certainly a line of credit as it says that directly. It is likely also a second loan, but to confirm that you’d need to contact the first lender to see if it has been paid off or not. That’s difficult if you are not the borrower. Options include having a title company order a payoff, asking the borrower to confirm, or calling the lender and pretending to be the borrower or second lender (both of which are likely illegal).
Do I need to pay for the 2012 loan. Yes, if you bought the 2016 loan at foreclosure auction, AND, there was still a balance due on the 2012 loan, that balance would remain outstanding against the property and would need to be paid to gain free and clear title to the property. You, personally, would not be obligated to repay that loan and it won’t affect your personal credit, but if your goal is to own the property it would need to be repaid.
The foreclosure of the 2016 loan should “wipe out” later debts like the 2025 judgment, so not that should not cloud title if you successfully win the foreclosure auction on the 2016 loan.
Thanks for the explanation. These documents are hard to understand. It is so complicated to find out if the 2012 loan is paid off…
This is a SB1079 case. The house was auctioned at $560,000. The 2012 loan amount was $240,000. I guess there is $200,000 principle left. The notice of trustee’s sale shows that the amount of unpaid balance and other charges is $191,138.
So, the $560,000 will pay off both loans and the auction fee. I should not worry about any additional payment. Am I right?
Note that PropertyRadar never “says foreclosing loan position is the 1st loan,” instead we make it very clear that we ESTIMATE those positions, and that you should not rely on that estimate.
It is unusual to see a HELOC for more than the first without the first being paid off, which is likely why we estimated that the newer loan paid off the older loan. And even without a reconveyance that is still possible, though I agree in this case the later loan is more likely a second.
The borrower is not T.D. Services, they are the trustee. The borrower is cutoff in the image you attached and would be before (herein “Borrower”).
I don’t see why you are saying the second is “related” to the 2012 loan. You have attached a Request for Notice, but that does not mean the loans are related, instead it is just a safety that second puts in place to make sure they get notified before a senior loan forecloses.
As to your questions:
Is the 2016 loan a second loan or an equity of credit? It is certainly a line of credit as it says that directly. It is likely also a second loan, but to confirm that you’d need to contact the first lender to see if it has been paid off or not. That’s difficult if you are not the borrower. Options include having a title company order a payoff, asking the borrower to confirm, or calling the lender and pretending to be the borrower or second lender (both of which are likely illegal).
Do I need to pay for the 2012 loan. Yes, if you bought the 2016 loan at foreclosure auction, AND, there was still a balance due on the 2012 loan, that balance would remain outstanding against the property and would need to be paid to gain free and clear title to the property. You, personally, would not be obligated to repay that loan and it won’t affect your personal credit, but if your goal is to own the property it would need to be repaid.
The foreclosure of the 2016 loan should “wipe out” later debts like the 2025 judgment, so not that should not cloud title if you successfully win the foreclosure auction on the 2016 loan.
[quote=“cluo, post:3, topic:5173”]
Hi Claire,
If you are overbidding as an “eligible bidder,” you would still be acting as a buyer at trustee sale, and any senior debt would remain. As such, I would NOT assume that overbidding the $560,000 would ensure that you get the home free and clear. I’d suggest asking the trustee. Note that they will have a trustee sale guarantee that should tell them whether or not that first is paid off. You can also ask them if they can arrange for title insurance on the purchase. Most traditional trustees will not, but some newer players like auction.com may offer options like that.
Best,
Sean
I am confused. If the default is for the second loan. For example, in this case $190,000. The first loan has $200,000 principle left. I bid the house at $600,000.
My understanding is: The $600,000 will pay off $190,000 and the auction fee first. The left will pay off the first loan automatically. If there is still money left, the rest will go to the owner.
I called the trustee company before; they didn’t tell any loan information.
Given your reference to SB1079 this appears related to a trustee sale in California. If that is the case, the “Prioritization of Lienholders” summary provided by AI above, is almost certainly wrong. I can’t click the links to see where it sourced that information.
If the second bullet point read: “Second, any junior liens on the property are paid, such as a third loan or recorded judgment.” Then that would be an ok, but simplistic summary.
Please don’t quote articles without providing the source. And the only source you really should rely on for these decision is the California Civil Code. Start with Section 2924. California Code, CIV 2924.. I personally did not buy a property at trustee sale until AFTER I read and understood those laws.
A lot from online might be wrong.
Below is an answer from an attorney. Like you said, I should try to find out if the first one was paid off or not. But it is hard to find out.
Hi Clair,
It’s relatively common for a junior lienholder to file a request for notice. You can read the law here California Code, CIV 2924e., but the basic idea is to protect a junior loan from being wiped out by the foreclosure of a senior loan without the junior loan even knowing it happened. This document puts the senior lender on notice that they must let the junior lender know if the mortgage goes into default, giving that junior lender time to protect themselves.
Best,
Sean
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