PropertyRadar Community

Which liens are not wiped out at the Trustee Sale ?

If I am holding a first trust deed note and have begun the foreclosure process in California, do I need to attend the auction to bid the price up so that I don’t lose the money owed to me, i.e. if the highest bidder bids only $150,000 and the note I hold is $350,000, do I need to attend to make sure I get the property back if the highest bid is way below the value of the property?

Do you have a trustee handling the sale for you? If so they will ask you for bid instructions before taking it to sale. Since you are the holder of the note and deed of trust, it is up to you where to start the bidding at. ? The only reason you would need to appear in person to bid, was if you really wanted the property and were willing to pay more than what you are owed. The reason for this is that the maximum bid you can place as the note holder is the total amount due on the note. If you want to bid more you have to show up with cash like everyone else. ? Hopefully you are using a reputable, experienced, trustee - they should be able to walk you through all of this and help you make sure no mistakes are made.

First time visitor to site - killer information, WOW!
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  1. What is the reason to buy title ins. after the sale, will the title co actually insure my transaction if I? miss something?
  2. Do you hire an abstractor to research every counties recorders office or will the title co.'s do the prelim for free if I pay for #1 above?
  3. Is there an investor friendly title co?that most investors use in Cal?
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    Appreciate your advice.?
  1. They certainly won’t insure what you missed if they find it. They are also unlikey to give you an owners policy - though they may with some exceptions. 2) I ran my own in-house title plant, others use abstractors, some get info from customer service at a title co in exchange for escrows (hard deal to get), and I have heard of one title co doing pre’s+insurance for hard money loans on auction purchases but that isn’t common. Try taking the chief title officer at your local title plant to lunch and getting their opinion on local options. 3) In my experience it really depends on the local office more than the company.

I am looking to purchase a property through trustee sale. ?The foreclosing lender is NOT the senior lendor, there is another loan on the property (LIne of Credit) from another bank two years prior. ?Am I responsible for the Line of Credit as well? ?Also, if I buy the property directly from the homeowner, am I responsible for both loans?

Hi Lisa. Yes, you would have to pay the senior loan if you bought the junior (later) loan at trustee sale. And yes, you would have to pay both loans if you bought directly from the homeowner.

How are the loan terms handled? ?Does it follow the original terms and interest rates??

I’m assuming you are asking about the terms on the senior loan if you buy the junior. It is important to know that the senior loan will almost certainly have a due on sale clause, and since a foreclosure is a sale, the senior loan becomes due in full upon your purchase of the junior loan. ? That said, I have been successful in making payments on senior loans. Best bet is to work with the prior owner to get their payment information or coupon book, and then just try sending the payments. Has worked well for me in all but one case - in that case the senior loan demanded to be paid off, or else they would foreclose, wiping out my ownership. ? Bottom line, you may be able to make payments under the current owners loan terms, but you better be prepared to pay it off.

Quick question about wiping out junior liens.
We recently opened escrow on a REO and the prelim title search found four junior liens. We were informed by the seller’s agent that escrow would have to be delayed approx three months to wipe out these liens. Is this a typical timeframe? What exactly is the procedure that the bank must follow to eliminate the junior liens.
Thanks.

Are any of the junior liens IRS liens?? If so that makes perfect sense as the IRS has 120 day right of redemption and you won’t be able to get title insurance (or a loan as they require title insurance) until that time period has passed. If non are IRS liens then I would go talk to the title company and ask what the issue is, as I see no reason why they shouldn’t otherwise be able to issue a title policy.

Hi, So there a a few houses I have my eye on that are going to Trustee sale. I have a 2 part question, 1. if its the 1st loan that’s filed the NOD and NTS and I am the winning bidder and there are no back taxes Do i still have to pay the rest of the loan or just the default about? 2. I have done some homework and found that the NOD was filed on the 1st loan but then the NTS is under a different trustee and stating a loan from the trustee and doesn’t state its for the 1st loan. How can I find out whats going on?

great forum !

  1. If you are the winning bidder, then you will owe nothing additional to have that loan removed from title. 2. Be sure to read the documents carefully and pay attention to which loan each is recorded against. Trustees make mistakes all the time.

If you have a new question please start a new topic.

Thanks,
Sean

How can you find out if there is a lis pending on a particular property?

It will be recorded at the county recorder, just like IRS liens, judgments, loans and most other things that affect title to real property.

if a HOA lien gets sold at the steps and shows THE BANK as the owner (trustee/trustor) and you win the bid but then find out that the law group the did the sale for HOA named the bank and the bank didnt own it would this unwind the trustee sale?

what are the chances of the IRS coming forword on collecting in the 120 days? Does the 120 days start from the day you buy the lien at trust sale?

From my experience the chances are pretty small.

I’d guess no, but you should discuss specifics with an attorney to be sure.