P.O. Box 994465
Redding, CA 96099-4465
Phone 530-246-2727
Fax 530-246-2723
“FORECLOSURE101”
The following information is being provided to you to better help you to understand the non-judicial foreclosure process. Please take a moment to read through this document and in the event you should have any questions, please do not hesitate to take notes and call me with any questions you may have.
INITIATING A NON-JUDICIAL FORECLOSURE:
To initiate a non-judicial foreclosure, you, as the beneficiary, will be providing me, the Trustee, with all the pertinent information regarding the status of the loan in default. You will be asked to complete a form, called “INFORMATION FOR TRUSTEE”. I must STRESS to you the importance of providing accurate and complete information. If you do not provide the Trustee with all information in your possession it is possible that the foreclosure process may be delayed as a result of incorrect or missing information
Once the Trustee has been given the completed “information” form, you will need to deposit with the Trustee your Original Note, Original Deed of Trust and any additional documentation concerning these loan documents (i.e.: modification agreement, additional advances, insurance payments, etc.), along with our required deposit. Additionally, you must deposit all evidence of advances made by you as the beneficiary for any items (i.e.: advances made by you for hazard insurance premiums, payment of county taxes, payments to senior lien holders, etc.) which you may have paid on behalf of the property owner.
Once all these items have been deposited with the Trustee, we are then ready to prepare the initial foreclosure documents for your execution as the foreclosing beneficiary. You will be required to execute a Declaration of Default, and a Substitution of Trustee. Once these documents have been executed, the Trustee is then ready to record the Notice of Default on your behalf, and commence with the foreclosure proceedings.
THE FIRST 90 DAY (3 MONTHS) OF THE FORECLOSURE:
Once the Notice of Default is recorded with the County Recorder, the ‘CLOCK’ begins. The first 90 days, (or 3 months) following the recording of the Notice of Default where the property owner still has the opportunity to cure the foreclosure by paying, to the Trustee, all arrearages due to you on your loan in addition to paying the Trustee’s cost due for handling the foreclosure, along with any delinquencies owed for taxes, hazard insurance, and senior loan payments.
The property owner is notified by the Trustee of the foreclosure proceedings by way of certified and first class mail. Within 10 business days from the recording date of the Notice of Default, the Trustee sends a copy of the recorded Notice of Default to the property owner/borrower both via certified and first class mail. The Trustee is required by law to send such notifications to the trustor/owner at all addresses known for the trustor/owner.
Therefore it is imperative you provide us with all addresses that you know of for the trustor/owner.
Additionally, all parties with an interest in the subject real property who are junior to you, or behind your loan, will receive notification of the foreclosure as it has the potential to affect their interest in the property.
During the “reinstatement period” any party who has a recorded interest in the subject real property also has the ability to cure the default, exactly as the trustor/owner has the ability to cure, by paying all arrearages due you along with the foreclosure fees and costs.
You, as the beneficiary, must accept reinstatement (payment of all delinquencies) and allow the trustor/owner to continue making payments as called for in your note. In the event you are foreclosing because your note has matured (becomes all due and payable in full) then you have the right to demand full payment without allowing the trustor/owner to cure the foreclosure by paying the arrearages due you – this is due to the fact that the arrearages due entail paying off the loan in full.
PROCEEDING INTO THE PUBLICATION STAGE OF THE FORECLOSURE:
Approximately 2 ½ months after the Notice of Default records, the Trustee will forward to you a document entitled “Authorization to Publish”. This is your instruction to the Trustee to proceed with the foreclosure after the 90th day following the recording of the Notice of Default by preparing a Notice of trustee’s Sale. At this time you will be asked to confirm that there have been no changes in the status of your loan since the Notice of Default recorded and deposit the estimated balance of the foreclosure costs. At this time in the event you have advanced funds you will need to inform the Trustee of all advances and provide the Trustee with documentation evidencing such advances.
On the 91st day of the foreclosure process, the Trustee is able to prepare the Notice of Trustee’s Sale. This document sets forth the date, time and place where the “Trustee’s Sale” is to be held. The Trustee’s Sale is a public auction wherein the real property pledged as security to you for repayment of the loan is literally auctioned off to the highest bidder. At the Trustee’s Sale, you as the beneficiary, will have the “opening bid” which will consist of a complete payoff due you under the terms of your note together with the foreclosing fees incurred by the Trustee. This amount is also estimated in the Notice of Trustee’s Sale. The property is then auctioned at the Trustee’s Sale to anyone who is able to bid higher than the opening bid. All bidders must prove to the auctioneer that they have funds in cash or cashiers checks so that the funds will be available to you as soon as possible.
In the event there are no bidders present at the Trustee’s Sale, the Trustee must still hold the sale, however your bid (the amount due to pay off the loan together with the foreclosure costs) will be the only bid, and therefore the highest bid, and you will become the owner of the real property at that time. The Trustee will then issue and record our “Trustee’s Deed” which transfers the vested interest in the real property from the trustor/owner to you. Once the Trustee’s Sale is completed, you are then the owner of the real property.
ACTIONS THAT CAN HALT THE FORECLOSURE PROCEEDINGS:
Once the foreclosure proceedings have begun, there are relatively few situations which will halt the proceedings against the wishes of the beneficiary:
(a.)BANKRUPTCY – In the event the owner files a petition in the Bankruptcy Court, all proceedings which could cause harm to the debtor (owner filing bankruptcy) are immediately halted by way of “AUTO- MATIC STAY.” An automatic stay does exactly as it implies – it stays or stops all actions in the process as well as staying or stopping any creditor from taking any action of any nature against the debtor. In order for a foreclosure to continue, it is necessary to obtain an order from the Bankruptcy Judge which “LIFTS THE AUTOMATIC STAY,” or removes the stay enabling the foreclosure to be continued at the same place in time it was halted by the filing of the bankruptcy petition. It is the responsibility of the beneficiary to obtain the necessary order enabling the foreclosure to continue. We recommend that you seek the advice of legal counsel knowledgeable in Bankruptcy Law at this time.
(b.)RESTRAINING ORDER – In the event the Trustor/Owner feels that the foreclosure action is being brought against them unjustly, they can request the courts to issue a “TEMPORARY RESTRAINING ORDER,” which effectively halts the foreclosure proceedings until such time as a court hearing date is set to enable a Judge to hear both the owner’s version of the situation and your version of the situation. After the hearing, the Judge will issue an order that will either lift the restraining order and enable us to resume the foreclosure or place a restraining order upon the foreclosure until such time as the matter can be settled between the owner and the beneficiary, or by the Judge. Again, we recommend you seek legal counsel if this situation occurs.
(c.)REINSTATEMENT – In the event the trustor/owner deposits with the Trustee all the funds as are necessary to cure the defaults as set forth in the Notice of Default, consisting of all arrearages due the beneficiary pursuant to the terms of the note, along with any delinquent real property taxes, providing adequate evidence of hazard insurance, and evidence of any senior loan being current, the foreclosure proceedings will be ended. Once you have received payment of all arrearages due you through the Trustee, you, as the beneficiary, must execute a Notice of Rescission. This notice will be recorded by the Trustee and will effectively remove the recorded Notice of Default from the current condition of title against the subject real property.
We hope that this information has helped explain the foreclosure process. Please keep in mind that each foreclosure is unique and there are other situations which can occur in any foreclosure which are not covered in this brief. In the event you have any further questions which we have not covered, please do not hesitate to contact us at: P.O. Box 994465, Redding, CA 96099-4465
Phone: 530-246-2727 Fax: 530-246-2723
Janelle St. Pierre – Manager
Sheena Hunter-Foreclosure Officer