How the Request for Notice of Default Lost a West Sacramento Seller Her Home
That Request for Notice of Default came in handy. A lawyer from Beverly Hills called yesterday to try to figure out how to save her home in West Sacramento from a trustee’s sale. I am certainly empathetic to those in this situation, but why do people call real estate brokers on the date of an auction? I can actually help if they were to call me a month or so before the sale date, but on the date of the sale, there isn’t much that can be done. For starters, I don’t give legal advice but I do have a lot of knowledge about foreclosure proceedings, primarily from my early days in the 1970s working first as a title searcher and later as an escrow officer. Many laws today are still similar.
This homeowner seemed confused as to how a credit union was able to grab her property and sell it at a trustee’s sale. It’s the Request for Notice of Default that did it this case. She had taken out a business loan, and used her home as collateral. I’m not sure if she understood that when you use a residence as collateral for a loan, the lender records a deed of trust, and that loan becomes a junior loan. When she fell behind on her payments on the existing mortgage, the Request for Notice of Default allowed the existing lender to alert the junior lien holder. Foreclosure laws give the second lender the right to make up the back payments and then file their own foreclosure proceedings under a Notice of Default.
The second lender can simply add the back payments to the amount they are owed and then foreclose for non-payment. That’s what this particular credit union did. The seller had filed a number of bankruptcies and tried to do a loan modification. In fact, she was in the middle of the loan modification when the credit union brought current the payments on the first mortgage. Goodbye loan modification.
Now, I received this phone call between two events yesterday. The first event occurred when our new cat Horatio elected to race after our Ocicat Tessa and, in the commotion, leapfrogged over the sofa and barreled our Christmas cactus to the floor, shattering the vase and sending dirt flying everywhere. Later, right after this call, while talking to a team member, I heard a loud crash in the sunroom. My hanging planter, which holds 4 elephant foots, had catapulted to the floor, banged into one of the litter boxes and smashed the plastic box into smithereens. I guess Horatio tried to hang from the plant. He can leap, that cat. Geez.
Those were not situations I could have foreseen. Our other 2 cats have never destroyed plants or vases like this. When a person stops making mortgage payments, though, that is the time to talk to the specialists who can explain how foreclosure works and what you can do to prevent a trustee’s sale. Not on the date of the trustee’s sale.
Anybody can file a Notice of Request for Default Notice. Even a tenant. If you’re a tenant renting from a homeowner, it might be a good idea to record a Notice of Request. It’s not difficult to obtain the trust deed information, and you can get it from a County Courthouse. It costs about ten bucks to record.
I had prepared a comparative market analysis for the seller. She had equity and stood to make about $20K from the sale. But it was not meant to be. The auction happened and the trustee refused to postpone it again.
If you’re in trouble on your mortgage and falling behind in your payments, call a Sacramento Realtor for help before it is too late. You may not need to lose all of your equity. You can call Elizabeth Weintraub at 916.233.6759.