What Is a Trust Deed Sale?
A Trust Deed Sale is also known as a Trust Deed Foreclosure. This happens when a trustor or borrower becomes delinquent and is is unable to bring the loan current during the Notice of Default period. A neutral third party called the trustee can then advertise and auction off the delinquent property on the steps of the courthouse to the higher bidder.
Other People Are Reading
-
Notice of Default
-
The trustee keeps the title of the property as a safety measure to ensure that the borrower pays the debt owed on the property. If the trustor falls behind on the agreed upon payment, the trustee begins the process of recovering monies owed on the loan. A Notice of Default is given to the delinquent borrower and must be recorded in public records for three months when the trustor becomes delinquent. The borrower may bring the loan current and pay any trustee fees during this period. If the trustor can not bring the loan current, the trustee has the right to advertise and sell the property.
Publication of Sale
-
If the loan is not brought current during the Notice of Default period, the trustee may publish a Notice of Intent to sell the property. This is done for three weeks in a local newspaper. The trustee will notify the public of the date, time, and place of the Trust Deed Foreclosure. Additionally, the address of the foreclosed property will be specified in the advertising. In advertising the foreclosed property, the seller is trying to attract investors willing to vie for the property so the amount of the loan and any trustee fees can be recovered.
-
Trust Deed Sale
-
The trustee may legally sell the property without going to court as long as a Notice of Default has been filed for three months and the intent to sell the property has been published for twenty one days in the newspaper. The Trust Deed Foreclosure is usually done on the steps of the courthouse where the property is auctioned off to the person who is willing to pay the most for it on the day of the sale. All sales are final and Trust Deed Foreclosures are sold "as is."
Function
-
The sole purpose of the sale is to pay the remainder of the amount due on the loan to the beneficiary or lender. The monies acquired at a Trust Deed Sale are given directly to the lender. Any funds over the amount due on the loan are refunded to the borrower.
Effects
-
Once property is sold in a Trust Deed Sale, it cannot be reversed by the borrower. The borrower has lost all claim to the property and has no recourse. Monies paid by the borrower on the property prior to the Trust Deed Sale are lost. The trustee cannot guarantee investors that the delinquent trustor will not retaliate and try to damage or destroy the property that has been lost.
-
