Notice of Trustee’s Sale

What is a Notice of Trustee’s Sale?

When a property faces foreclosure, a Notice of Trustee’s Sale is one of the steps in the process. States may have different legal requirements,  but in essence a notice of trustee’s sale means the property owner has fallen behind in payments to the mortgage holder and the property will be sold to recover the mortgage holder’s money. There are many legal requirements involved, including that the mortgage payments be at least 90 days late, proper notice given to the property owner, and in most states, a public notice (the Notice of Trustee’s Sale) is published or posted before the actual event, giving the property owner many opportunities to pay the money owed.

Many states require “judicial” processes, which means the trustee for the mortgage lender files suit in local court seeking foreclosure and posts notice of the foreclosure. In those states where mortgage lenders may have “power of sale” clauses as part of the loan agreement, the mortgage lender may foreclose without the court’s involvement or notice by the trustee.

By strict definition, the “trustee” is a third party who handles many of the steps of a non-judicial foreclosure, but the phrase “trustee’s sale” generally refers to the process of auctioning a home that is in foreclosure.

By using Infotracer.com you may research the history of a property’s ownership, or the owner of the property, including what other parcels he may have.

Renegotiation

Mortgages that require a judicial process for foreclosures often have to comply with state or court-ordered opportunities to renegotiate the mortgage that favor the property owner. This is a 90-day time period during which the property owner may attempt to get up to date on mortgage payments or renegotiate the terms of the mortgage so the property is not foreclosed upon.

If appealed to a court, the judge may extend the property owner’s time period for restoring his account to good standing, particularly if there are extenuating circumstances, such as a loss of employment, whether the property is occupied, terms of the mortgage, etc. Courts may give the homeowner up to a year to comply with the mortgage requirements.

Steps of Foreclosure

  • Homeowner or property owner falls behind in mortgage payments, generally 90 days
  • Mortgage lender sends a Notice of Default that warns the property owner that foreclosure proceedings could start within a specified period of time
  • A property owner has a period of about 90 days called Right of Redemption to renegotiate the terms of the mortgage, pay the overdue balance, or fight or stall the foreclosure
  • Auction of the property
  • The high bidder receives a certificate of title or trustee’s deed following the auction, depending upon whether it was a judicial or non-judicial foreclosure
  • Some states may allow the former property owner the opportunity to exercise his Right of Redemption for a period after the foreclosure auction. This is done by paying the highest bidder the amount of his bid plus expenses, which essentially buys the property back.

This list suggests ways to prevent a foreclosure auction, including filing for bankruptcy, seeking a restraining order from a court, selling the house (if it’s a “short sale” which doesn’t completely repay the mortgage company then the lender must approve the sale), and paying off the mortgage.