Deed of Trust Foreclosure

What is Trust Deed Foreclosure?

Deed of trust foreclosure is a type of foreclose that is different from a mortgage foreclosure. There are two main types of foreclosure; deed of trust foreclosure and mortgage foreclosure.

Why is a deed of trust foreclosure faster and easier than a mortgage foreclosure?

In a deed of trust foreclosure, the beneficiary can foreclose on the homeowner without having to go through the court process. In a deed of trust system (as opposed to mortgage system), the beneficiary or the lender holds the legal title of the real estate property. So, whenever the loan is in default, the beneficiary or lender can easily foreclose on the homeowner by informing the trustee of the deed of trust.

Role and power of the trustee in a deed of trust foreclosure case

Because there is no court action involved, the trustee has the authority to sell the property for the beneficiary in the event the trustor fails to make his monthly mortgage payments. As with any trust deed foreclosure, first the trustee will issue a Notice of Default (NOD) to the delinquent borrower and records it. Usually the trustor has 90 days to cure the loan and pay all the penalties. Once that time is up, they don't play Mr. Nice Guy anymore. They will post a notice of sale on the front door of the property, the sale of the property is advertised in the newspaper to attract the biggest investors, and after a 3 week publication, the property is auctioned off on the courthouse steps. The highest bidder walks away with the property.

Who benefits from a deed of trust foreclosure?

Because a deed of trust foreclosure is easier, faster, and cheaper than a mortgage foreclosure, most lenders prefer the deed of trust foreclosure process. However, for the borrowers, a deed of trust foreclosure means if they are in default, they will probably have to find alternative housing very soon.

• California Deed of Trust Foreclosure
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