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Two months ago, Mr. R of Santa Clara County came to my office after a Notice of Default has been filed but before the date of Trustee Sale. We immediately contacted the lender and we submitted the required documents. We requested a reduction in interest rate from 7 percent to 4 percent; a reduction in principal to current fair market value and a forgiveness of all missed payments and late fees. After interview by the lender, Mr. R was granted a forgiveness of all missed payments and penalties, a reduction in interest rate to 4 percent and a reduction in the principal balance of the loan by $102,000. In this case, Mr. R made the right decision to request for loan modification before the date of Trustee sale.
Question: What is a Notice of Trustee Sale?
Answer: A Notice of Trustee Sale informs the borrower that his or her house will be sold at public auction by the lender (the Trustee) on the date specified in the notice. Usually, the lender is also the buyer in public auction.
Question: When is the Notice of Trustee Sale sent to borrower?
Answer: The Notice of Trustee Sale is usually sent to the borrower at the end of the 90 days period given to the borrower on the Notice of Default to make his payment on the loan current. By the time the Notice of Trustee Sale is received by the borrower he has only 20 days to redeem the property by paying all missed payments plus costs.
Question: How do I know that a Notice of Trustee Sale has been sent to me?
Answer: You should receive the notice in the mail. In addition, the lender is required to post in a conspicuous place in your property the Notice of Trustee Sale.
Question: Is there a need for the lender to go to court to foreclose my residence?
Answer: No. In California, most foreclosure is non-judicial which means outside the court. The property is sold at an auction to the highest bidder.
Question: Can I redeem the property after the auction date?
Answer: In California non-judicial foreclosure, there is no right to redeem the property after the auction date. Once the sale of the defaulted property is complete, the sale is final.
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