Trustee Sale Delay and Trustee Verification Delay
Trustee sale delays or trustee verification delays are tactics used to postpone the trustee sale, also known as the foreclosure sale or auction in non-judicial foreclosure states. According to California Civil Code 2924 g (c) (2) (for additional reference see the complete Section 2924 of the Code), foreclosure sales can be delayed for up to one year for any of the reasons outlined in Section 2924 g (c) (1). The reason that matters to us for the purpose of this discussion is “at the discretion of the trustee.” In other words we can legally delay a foreclosure sale if we can convince the trustee to do so.
What is a Trustee, Some Background
In states with non-judicial foreclosures like California, foreclosures typically occur outside of any courtroom and lack the oversight of a judge. In non-judicial foreclosure states, foreclosures are executed by a trustee which is why these states are also known as trustee states. Trustees are independent third parties that are contracted by the bank or loan servicer to foreclose on a home.
Trustees are a required component of the non-judicial foreclosure process because banks use a deed of trust in these states, as opposed to employing a mortgage, when they make a home loan. A deed of trust is a three party transaction involving a beneficiary, a trustor and a trustee. The beneficiary in these transactions is the lender because it benefits from the interest paid on the loan. The homeowner is the trustor since they are trusted with the money loaned. The trustee is the one who holds title on the property and the party that will initiate a foreclosure on behalf of the beneficiary. The term trustee is a legal term that is defined as someone held to a fiduciary duty similar to that of a trustee proper.
How to Challenge the Trustee Sale
In non-judicial foreclosure states you can delay the trustee sale by challenging the trustee to verify that they have followed the detailed and timely legal process required for a foreclosure. If a potential violation is revealed prior to the trustee sale date, the trustee will postpone the sale, otherwise they run the risk of facing sanctions or losing their license.
Some of the potential violations are pointed out below, and we even offer a sample letter of objection to the trustee (also available as a Word Document) that you can use as a template, but ideally if you can afford professional assistance we can help connect you to a trusted foreclosure relief agency that specializes in trustee sale verification delays. The investment required to engage these agencies is typically less than what you would pay in rent if you had to move out of your home and get an apartment, so it makes financial sense for those that have the means.
Potential Trustee Violations
A legal foreclosure must comply with California Commercial Code 3301 at the start of the foreclosure proceeding, when the notice of default is recorded, and throughout the process until the trustee sale date. Fundamentally then the requirements of CCC 3301(a) and CCC 3301(b) ought to be met:
- CCC 3301(a), the Holder of the instrument – Has one entity consistently held the note from the time the Notice of Default was filed on through all subsequent actions? California law stipulates that there are two conditions for a person to qualify as a Holder:
- Actual Possession: the person must have actual physical possession of the instrument, and
- Transfer by Endorsement: the instrument must be payable to that person where the transferor must endorse the instrument to make it payable to the transferee (CCC 1201(20), CCC 3205(a))
Demand inspection of the original note, and regardless, even if the note is delivered, then insist on proof of possession at the time the Notice of Default was recorded. If you find that possession did in fact exist at all times, endorsement and negotiability must be proper and timely. Some follow-up questions that you should pose are:
- When was the note endorsed?
- What party was it endorsed to?
- Is there an agency relationship between the endorsee and the foreclosing agent?
- Is the endorsement in blank?
- If endorsement exists, is there a purchase and sale agreement that stipulates Holder rights, and was it in place before the Notice of Default?
Delaying the Trustee Sale for Months
To attempt using this tactic on your own you can take advantage of our sample letter of objection to the trustee (also available as a Word Document) and include the line of questioning that we present above.
Ideally, we recommend professional help if you can afford it because our partners effectively present the trustee with a comprehensive list of potential violations that they must invalidated or the trustee runs the risk of being in breach of California law, and consequently could face sanctions or lose their license. While the trustee is kept busy month after month trying to discredit new claims laid against them that they are potentially violating the rules and procedures of a legal California foreclosure, you, the homeowner, are essentially living in your home free of a mortgage payment and in a position where you don’t have to find a new place to rent.
Contact us to get more information about these trustee sale verification delay services.
