trustee sale foreclosure
If you have a rental lease and home is about to foreclosure, can you sue landlord for remainder of lease?
We signed a 2 year lease through a property management firm just 90 days ago. Where we just informed by landlords that the property is already set for a foreclosure trustee sale in 2 months. They are attempting also to do a short sale, yet it looks like home will go to the foreclosure sale.
If we are forced to move out if home does go to foreclosure sale, can we pursue legal actions to recover damages for the other 1 1/2 of lease? Whats upsetting is that they actualy stopped paying the mortgage on property the day that we moved in.
I read through the contact and it states that either party will be responsible for attorney fees and such if lease is broken.
Not sure if it varies state to state? We are in Arizona.
Thanks
You aren’t damaged because you haven’t paid yet. If you had pre-paid the lease you’d have a case.
trustee sale foreclosure
Foreclosure is actually a good money making business in the world of real estate. Investors are making millions off foreclosure properties. Unfortunately they are thriving off individuals who are losing their homes. Below is a brief guide on foreclosure by power of sale 101.
Generally, a person can loan some amount against his property to a bank or other lending institution. The higher the market value of the property, the higher the loan amount will be. As soon as the contract is sealed, the mortgage loan is issued. This gives the lender the right to foreclose on the property if the money is not paid according to the loan terms. Foreclosures can be judicial or by a trustee sale invoked upon a power of sale clause in the loan’s deed of trust.
What is a Judicial Foreclosure?
The proceedings of judicial foreclosure are supervised by the court within the presence of all involved parties and lawyers. This ensures that the judiciary system and all issues are dealt with properly and according to the law.
What is Foreclosure by Power of Sale?
A lender does not need the supervision of the courts to initiate a foreclosure by power of sale. Lenders often prefer power of sale foreclosure proceedings because they tend to be faster and less expensive. The proceeds from the sale of the property will first go to the mortgage holder (lender or bank), then if there is anything left over the lien holders and borrower will receive it.
Advantages and Disadvantages of Power of Sale Foreclosure
- If there are title problems with the property such as actual deed defects or liens and lessees, a power of sale foreclosure can only be resolved judicially.
- Deficiency judgments are prohibited in most jurisdictions. This means that the mortgage holder cannot sue the borrower for a deficiency judgment.
- Foreclosure by power of sale must already be specified in the mortgage contract in order for it to take place.
- A mortgage in the form of an absolute deed prevents foreclosure by power of sale.
Foreclosure by Power of Sale is Mandated by:
Deed of Trust
The majority of jurisdictions prohibit a foreclosure by the power of sale without a deed of trust present. This entity is the third party or known as the trustee. The trustee is entrusted by the lender to hold the mortgaged property and mandated by the lender to act on the foreclosure without any questions.
The trustee will take charge of the foreclosure proceedings, and the deed of trust will allow the mortgage holder to bid on the foreclosed property during the auction, provided that both parties are not closely associated. If they are, the mortgage holder/lender is forbidden to bid.
Power of Sale Constitutional Issues
Although this procedure has been controversial, for the best interest of all parties involved the lender is still required to post a Notice of Sale advertisement in the local newspaper within the jurisdiction that the property is located.
The Fourteenth Amendment of the U.S. Constitution mandates the notice of sale and hearing requirement. However this issue has been met with much controversy and there doesn’t't seem to be a specific answer yet. So far it seems that a public notice of sale is required for judicial foreclosures, but not for non-judicial foreclosures.
Learn more about Power of Sale Foreclosure & Get your Free Do It Yourself Loan Modification Kit. This loan modification kit includes everything to Stop Foreclosure and Save Your Home with a loan modification. Includes Loan Modification Worksheets, Loan Modification Forms, detailed instructions, lender Rolodex, 50 bank specific forms, And Much More! Absolutely Free!
Visit our website for How to articles, mortgage calculators, free sample hardship letters, foreclosure timelines, and dozens of informative articles on loan modifications and foreclosure. Stop by to check out our growing library of free financial kits. We currently have bankruptcy kits, credit repair, and loan mod with more on their way!
FreeDIYkits “Helping Homeowners Help Themselves”
What’s the best way to go about obtaining a foreclosure report on a property before bidding at a trustee sale?
I want to bid on properties at trustee sales in Orange and San Diego County, California, but before I do I need to check the properties ahead of times to make sure there are no outstanding liens and also that I am bidding on the senior lien and not some other junior lien. I have been told to check online with each counties recorders office, but have had no luck doing so. Have also been told to start at the county courthouse doing the research manually, but also have hadn’t any luck figuring out how to go about that. I have the money to invest in a few foreclosures, but I want to do it via trustee sale, as opposed to short sale or REO, and I am just trying to cover all my bases as I know trustee sales can be very risky. Anyone who has experience with trustee sales in either Orange County or San Dieg county, any advice would be greatly appreciated. Thanks.
I am an educated real estate investor who became a licensed real estate broker. I know the foreclosure process inside and out and practice in Orange, San Diego and Riverside County.
First off, to answer your question, you need access to a title company to get the lien information to see if the credit bid at the trustee’s sale is for the first, second or third position. Even websites like www.realtytrac.com can’t tell you the position of the foreclosing lien holder.
Now to address your question. Very rarely do you get a good deal at a trustee’s sale. That’s because very rarely does a property with equity go into a trustee’s sale and if it does, very rarely does no one show up to bid on it.
Also, the answer which told you that trustee’s sales are not risky was incorrect. Trustee’s sales are risky not because you don’t know who is foreclosing (or existing liens, such as Tax liens, which will stay with the property), but because you generally do not know the condition of the property. It could have foundation or structural issues. It might have mold or plumbing issues. It could be so messed up that a conventional lender will not lend money on the home, thus affecting your holding cost and/or exit strategy.
It is of my opinion that the best place to pick up a home is in pre-foreclosure by doing a short sale. Some REOs are good, but they are usually 10% below market value or at market value. The only way to pick up REOs at a good rate is to buy them in bulk, but then you run into the risk of not knowing about the individual properties.
Feel free to contact me if you have any further questions. Depending on your exit strategy and what you are trying to accomplish, I might even be able to help you out with the information you need.
Regards…
Jim TV Trustee Sale Tour