Great to see you as well Juan!
Technically what happens is that the Trustee’s Deed reverts back to 8am on day of foreclosure sale so whoever won at foreclosure auction technically “owns” the property on the day of the auction once that TDUS records even though the TDUS doesn’t record for 18-48 days later.
I would definitely obtain hazard insurance if I won at auction despite the fact that a 3rd party could come in and end up owning the property.
The way the new law is written, an Eligible Bidder must submit an “intent to bid” within 15 days. They have until 45 days to actually bring in the cash necessary to complete the bid. So if a fire happened on day 30 and they didn’t pay the trustee the cash then they could simply never pay and not face any penalty. Similarly, if the Eligible Bidder submitted a cashier’s check on day 29, there is no process in place that would let the Eligible Bidder retract their bid at that point. This could lead to a very odd situation where the insured doesn’t actually own the property (assuming the Eligible Bidder never obtained insurance).
My two conclusions on this:
(1) The auction winner should immediately obtain property insurance on day of auction.
(2) Any Eligible Bidder who submits a cashier’s check to the trustee should also obtain insurance.