How to Transfer a Deed of Trust During Foreclosure in California
Typical foreclosures in California require no judicial action. Lenders contract with a third-party trustee to sell the property. Types of trustees include banks, escrow agents and title companies. The trustee takes the deed of trust and handles all aspects of the sale. For deeds of trust with a "power of sale" clause, the process is simple and can be completed in four months. The "power of sale" clause gives the lender preapproval to sell property in the event of the borrower's default. In a non-judicial foreclosure, the lender forgoes collection of the amount owed for an expedited resolution and lower cost. For deeds of trust with a "power of sale" clause, the process is simple and can be completed in four months.
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Things You'll Need
- Deed of trust
- Trustee's sale guarantee
- Notice of default
- Notice of sale
Instructions
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1
Review the "power of sale" clause in the deed of trust. Determine whether the clause provides instruction regarding preapproved sale procedures. Follow the clause's sale instructions. If there are no instructions, follow California's procedure for non-judicial foreclosure. Note that if there is no "power of sale" clause you should contact an attorney for assistance in filing a foreclosure lawsuit in the local district court. Judicial procedure is required with deeds without sales clauses and is very complex.
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2
Order a copy of the trustee's sale guarantee from the title company. The guarantee confirms the priority of each lien or encumbrance recorded against the property and provides the mailing information for all interested parties.
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3
Draft a notice of default and file with the recorder's office in the county where the property is located. Include trustee names, description of property, where it is recorded and a statement of the breach and amount delinquent.
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4
Mail a copy of the notice of default to the borrower and any other interested parties listed on the trustee's sale guarantee.
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5
Create a notice of sale three months after filing of the notice of default. The notice must include the time and location of the foreclosure sale, the trustee's name and contact information, the property address and a statement that you are selling the property at auction.
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6
Publish the notice of sale once a week for three weeks in a local newspaper in the county where the property is located.
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Record the notice of sale at the recorder's office in the county where the property is located at least 14 days prior to the sale.
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Mail by certified mail with return receipt to the borrower at least 20 days before the sale. Note that the borrower can resolve the default by paying what is owed and stop the process until five days before the sale date.
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9
Post a sign on the property announcing the sale at least 20 days before the auction.
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10
Hold the auction and sell property to winning bidder.
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Tips & Warnings
If there is no "power of sale" clause, call an attorney for assistance. In this case, the trustee or lender must file a lawsuit against the delinquent owner in district court, which is a complex process. A judicial foreclosure can last more than a year.
