Expert: Dick Dennis - 5/25/2009

Question
 This is in Calif.
Buyer is current of 1st TD. But Is later on The 2nd TD.  I would like to foreclose, and get the property back.  How do I make arrangements to cover the monthly payments on the 1st with the Bank?  We can cover the payments on the first. Of does she have to be late on the !st before we foreclose on our 2nd TD.

Answer
Technically, Vickie, any TD is late on the day after the payment is due. You then may file a NOD (Notice of Default), although most TD holders would send a courtesy reminder of payment due within 15 days. Then upon no response or unsatisfactory response, you would contact the TRUSTEE as mentioned on the Trust Deed you hold (not the note) and instruct that trustee that the payments are in arrears and you want to file a NOD. At this point, I should tell you that ANYBODY may fill that job as Trustee, no matter what it says on the trust deed, except the borrower. Even yourself may fill that position as long as you know the foreclosure process here in California.

If you have someone who is knowledgeable to fill the job as trustee, then go ahead and use the person or company. I have filled the position as Trustee a number of times in the past, if that helps. I am located here in southern California.

You do not have to be concerned with the first TD at this point as long as you know for sure that the borrower is current with those payments. If and when the borrower stops making payments on the first TD, just make sure that your 2nd TD has recorded its NOD first. It is a scheduled 111-day process. As long as you have filed your NOD first, you will not be concerned with being wiped out by the first TD's foreclosure sale, should that ever happen. After you have filed that NOD, you should keep in close contact with the first TD holder advising them of your interest. After you actually conduct the foreclosure sale is when you should advise the first TD that you are now the owner of the property. Whether you fill the trustee position yourself or not, be sure you learn everything you can about the foreclosure process here in California.

I do wish you well, Vickie.

Dick Dennis
dixiedee13@aol.com