Legal Question in Real Estate Law in California
CA foreclosure and credit
Condensed version:
My home in Palmdale, CA, went into foreclosure in October of 2007. The auction took place in mid December of 2007. An entire year went by with no calls or letters from the lender. On October of 2008, I checked my credit report and it showed that the 1st mortgage was still CURRENTLY PAST DUE, while my 2nd mortgage was charged off around the time the auction took place. I called my lender and they told me that the house did not sell and that as long as the house remains theirs, I was still responsible for the loan and it would continue to show PAST DUE until it resold to a third party. Being that I never received a letter of postponement of the auction, I assumed the house was now their (lender) property. And just recently, I received a letter stating that the insurance expired on December of 2008 and I was liable for keeping it insured even though I no longer live their.
My questions are:
1. Are the lenders actions normal? Is this how the foreclosure process works?
2. If not, then what, if anything, can I do?
3. Am I still liable even after 2 years since the foreclosure started? Shouldn�t the property belong to the lender, not me?
4. When do the 7 years of bad credit begin? From day of foreclosure or
1 Answer from Attorneys
Re: CA foreclosure and credit
A foreclosure sale by a trustee under a power of sale is not a "strict foreclosure" in that, if there is no sale for whatever reason, title does not pass. If there were no sale, the lender does not become the owner - you stay on title. Who knows what happened here? Maybe a quickie title search at the courthouse, or a call to the party that acted as trustee or auctioneer at the supposed foreclosure auction, would reveal useful information. It would be very unusual for there to be no bid at all at a foreclosure sale. You could have bought the house for a dollar (in theory, at least). Answers to your specific questions:
1a. I'd say based on your facts that something "not normal" has happened (or failed to happen). Are you completely sure the mid-December 2007 sale was by the holder of the 1st D/T, and not perchance by the holder of the 2nd?
1b. Who knows? It's possible the sale was postponed but you failed to get the notice, or the sale may have been attempted but aborted, either because there were no bids or because of some other irregularity.
2. Investigate further. Question the trustee or auctioneer. Check the recorder's office for any filed instruments around Dec. 2007 or thereafter. Figure out who owns or claims to own the property in the public records, including to whom the taxes are being assessed. Find out who lives there now (if anyone) and how they acquired the right of possession (purchase, rental, etc.).
3. Maybe...you need to find out whether the property was sold, by whom and to whom, and what the selling price was. You are entitled to this information from the trustee.
4. I don't know; you'd have to ask the credit agencies how their policies work.
Finally, as to insurance, if you are the owner and have a non-discharged lien requiring you to keep the collateral insured, yes, you are responsible for maintaining insurance whether you live there or not....it's a term of the loan.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
