Trustee Rescinding Auction due to Non notification of IRS


#1

About 3 weeks ago, the Trustee contacted me by phone and verbally told me that the sale will be rescinded because Trustee did not pre-notify the IRS of the nonjudicial sale. There I was also asked to list all my costs and expenses, including the attorney fees as the eviction process was in place.

The property was purchased in an auction 5 weeks ago with intent to fix it up and live in it. So the 120 day redemption period was factored into the decision making. The deed had been recorded in my name within the 15 day period.

After the Trustee verbally notified me of the intent to rescind, I called the IRS who said that the IRS lien, even though junior, will continue to be attached to the property due to the non-notification by Trustee. Had I known the Trustee did not perform their oblgation to pre-notify the IRS, I would not have purchased this as the amount of the IRS lien on top of the auction.

The Trustee said that they are talking to the lender to have the rescission done. It’s been 3 weeks now, and even with repeated phone calls (that go to the voice mail remain unanswered). (I think they have ID’d my phone number so they let it go to the voice message. The Trustee is California Reconveyance and is the biggest Trustee in the State of California.

Can anyone tell me what the timeline is for the Trustee to remedy this situation? Can you suggest any contact at California Reconveyance, of a higher authority, that can even tell me how they are going to fix this and the timeline for such? My contact is the Sales Manager of the Trustee (who may have blocked my phone calls).


#2

We are not certain that the failure of the trustee to notify the IRS of a pending sale is grounds for a rescission of the sale. We highly suggest you consult with an attorney on this matter.