It is our company's policy that we will not start a foreclosure until the Borrowers are behind at least two monthly payments. Also, if the only reason for starting a foreclosure is because the property taxes are delinquent (but the loan is current) we would want an advance to be made to the delinquent property taxes before we will issue a Notice of Default.
PLEASE NOTE: If you are foreclosing on a Note and Deed of Trust which is a first lien Deed of Trust, for owner-occupied residential property containing no more than 4 dwelling units, there is recent legislation which requires specific contact with the Borrower a minimum of 30-days before recording a Notice of Default. The Beneficiary or Loan Servicer will have to sign a Declaration, which will be recorded with the Notice of Default, stating that the requirements were met. Please contact our office so we can go over the requirements with you.
Copies of the recorded Notice of Default will be mailed to the Borrowers, by 1st class and Certified Mail, at their last known address and any other addresses which may arise from the title search. We will also send copies of the recorded Notice of Default to any junior lien holders, who would be effected by the foreclosure.
When we record the Notice of Default, we will also order a Trustee's Sale Guarantee report. This report is similar to a preliminary title report, but specific to the foreclosure process. We will send you/the Beneficiary a copy of the Trustee's Sale Guarantee report with a copy of the recorded Notice of Default. The Notice of Default must be on record for three-months before the next step can be taken.
After the three-month waiting period has elapsed, we could begin publication of a Notice of Trustee's Sale. We will not start the publication process without the approval of the Beneficiary, or their appointed agent. The Notice of Trustee's Sale will set the time, place and date of the Trustee's Sale. The Notice of Sale must be published, once a week for three consecutive weeks, in a newspaper where the property is located. The Notice of Sale will be posted on the property and in a public place, as required by California Civil Code, and will be mailed to the Borrowers via Certified and 1st class mail. Notices will also be sent to any junior lien holders.
The Trustee's Sale will be conducted as a public auction. The opening bid will be everything due on the loan, including foreclosure fees and costs and any advances paid to senior encumbrances or paid to protect their security interest. In order to bid at the Trustee's Sale, a bidder must have the full amount of the opening bid and any amount they wish to overbid in a Cashier's Check or cash. The property will be deeded to the highest bidder and the Beneficiary would receive the money they are owed. If there are not any qualified bidders then the Beneficiary would receive title to the property.
In the event that the Trustor files for Bankruptcy protection, the foreclosure (as all collections), would be stayed. Bankruptcy is a legal matter; The Foreclosure Company, Inc., cannot represent a Beneficiary in the Bankruptcy proceedings. The Beneficiary could attend the Meetings of Creditors and have their say, or they could hire a Bankruptcy Attorney to go to court on their behalf and ask for their secured loan to be removed from the bankruptcy protection. A Borrower cannot just sit idly in bankruptcy; they will have to file and follow a plan or the Bankruptcy Court can dismiss the case.