summary of foreclosure proceedings
A. REQUIREMENTS: In order to start foreclosure, we must receive:
1. Original Note
2. Original Deed of Trust
3. Beneficiary's Request to Prepare Notice of Default
4. Substitution of Trustee, signed and notarized
5. Opening deposit under our fee schedule
6. Other documents may be necessary unusual security situations
Upon receipt of the above, we will record the Notice of Default and obtain a Trustee 's Sale Guarantee from our title insurance company. We will perform all other foreclosure steps as required by law over the approximately four month foreclosure period. which must be reimbursed by the debtor before reinstatement. Therefore our client should not accept any payment without first checking with us to determine what cost have been incurred If beneficiary accepts payment without collecting foreclosure costs, he may become liable for payment of those charges and/or delay the foreclosure proceedings.
B. STEPS IN FORECLOSURE PROCEEDING: A typical foreclosure is completed in approximately four months, but may be extended by Bankruptcy Court filing or litigation.
The steps are as follows:
1. REINSTATEMENT PERIOD: (Three months)
This commences with the filing of the Notice of Default. During the three month period the owner of the property and any junior lien holder is allowed to reinstate the loan by paying all arrearage plus foreclosure fees and costs. The reinstatement right (provided the note isn't all due) continues up to five (5) days before the Trustee sale.
2. PUBLICATION PERIOD: (Approximately one month)
After the (3) month period has expired without reinstatement, the trustee will prepare the Notice of Sale for mailing, publication and posting. The Notice of Sale must be published once a week for three consecutive weeks. Cost of publication (and your fee) varies according to the length of the legal description and newspaper fee schedule. The trustee sale date is set for no less than 21 days from the date of first publication, but this time usually works out to be about one month.
3. TRUSTEE SALE:
The Trustee Sale is conducted as a public auction in must be present in which the Trustee must act as a neutral party to seek the highest bid. The opening bid is the beneficiary's credit bid (principal, interest, advances and all foreclosure costs). Anyone else wishing to bid must have cash or cashiers check in the amount of his bid. If the beneficiary wished to make an overbid he must be present at the sale with a cashiers check for the amount of the overbid. The Trustee's Deed is recorded in the name of the highest bidder who then assumes title to the property subject to all senior encumbrances and unpaid property taxes, If there is no overbid at the sale, the property goes back to the beneficiary. All costs and fees must be paid before the Deed will be recorded. If the property is occupied, then eviction proceedings ae necessary.
C. COSTS AND FEES OF FORECLOSURE:
All fess are fixed by law, and depend on the principle balance due on the note. Costswill vary slightly, but may be predicted within a small range. The biggest variable depends on publication costs where there is a lengthy legal description of the property. Costs and fees will be fully reimbursed to the beneficiary unless the property goes back to the beneficiary at the foreclosure sale.
Costs and fees will be less than the maximum if the debtor cures the default early in the proceedings. We will provide you with an exact quote based on the note balance due to you. The opening deposit is usually about 30% of the total estimated costs and fees. If the debtor cures the default, you receive a full refund from us. In the event the debtor files bankruptcy, or brings a state court action, you will be responsible for hiring and paying an attorney. We will provide referrals if you request.
D. CANCELLATION:
You may cancel the foreclosure proceedings at any time, for any reason. We will bill you for the costs and fees that have been insured to that point in time.