Frequently Asked Questions
Who can file a foreclosure? Are banks the only ones who can foreclose?
No. Financial institutions, such as banks, are not the only lenders who can foreclose. Any person or organization who has a loan or a lien secured against real property, whether residential or commercial, can foreclosure to recoup principal balance, fees, and foreclosure costs. This can include banks, investment groups, individuals, and homeowners' associations.
I have a lien or fee against a property, but it is not recorded yet. Can I foreclose?
Yes, you can foreclose once you record your lien. Typically, organizations like homeowners' associations will place fees or other fines on a property, but wait until they want to foreclose in order to record. In these situations, we are happy to help record your lien before we begin the foreclosure process.
What is the foreclosure process like? What should I expect?
Depending on what your goals are, the foreclosure process can vary greatly. Once a borrower stops paying and the loan defaults, a foreclosure can begin. State statutes regulate the entire process. At each step, various notices are sent by mail, posted to the property, and/or published in newspapers in order to give the borrower and other lien-holders notice of what is happening with the property. There are a variety of outcomes available if the borrower works with us. If the default cannot be cured, the property will eventually likely be sold at auction to a third party. Here at TTDSC, we walk you through the process to make sure all statutory requirements are met and that you can recoup what is owed on the property.
I'm not sure what my goals are. What are the possible outcomes of foreclosure?
There are many options when it comes to foreclosure outcomes, depending on what you prefer and how cooperative the borrower is. On one end of the spectrum, beginning the process of a foreclosure can show the borrower that you are serious, and may be just the push they need to cure the default, and either pay off or restore the loan. At the other end of the spectrum, if throughout the process there is either no response from the borrower or no way to work things out with them, the property can ultimately be sold at auction to satisfy the loan. The following are a few of the possible outcomes of foreclosure:
- Third Party Sale --the property is sold at auction, and the proceeds repay the principal of the loan and any foreclosure costs
- Deeds in Lieu of Foreclosure --the borrower deeds the property directly to the lender to avoid foreclosure
- Payoff --the borrower satisfies the loan by paying the entire principal balance of the loan, plus any additional fees and foreclosure costs
- Reinstatement --the borrower makes a payment to bring the loan current, including past due payments, fees, and penalties, as well as any foreclosure costs, and then can continue with the existing loan
- Loan Modifications --the lender and borrower agree to new restructured terms for the remainder of the loan and the new principle can include past due payments, fees, penalties, and foreclosure costs
- Forbearance --the lender and borrower agree to temporarily delay foreclosure
Am I responsible for the cost of foreclosing?
Typically the lender is not responsible for foreclosure costs. Our foreclosure fees and costs are added to the principal debt, meaning they would be paid by your borrower if they reinstate or modify the loan or if they pay off the loan. Fees are also included in the total debt if the property is sold at foreclosure sale. The lender will typically only pay the costs of foreclosure if they acquire the property.
How much will the foreclosure process cost me?
A foreclosure usually does not cost the lender anything, since the fees and costs typically become part of the principal debt. Because the non-judicial foreclosure process we follow is regulated by state statute, our fees are standardized based on the legislated amount. For a breakdown of estimated fees and costs for your specific loan, we are happy to provide you with a complementary pricing quote. The information we need for the most accurate quote can be found on the New Foreclosures page.
Do I need to deal with the courts during a foreclosure?
In some states, a foreclosure can only be filed through the court system. In California, most foreclosures are non-judicial, meaning the courts are not involved in regular foreclosure proceedings. State statutes allow and regulate TTDSC, as a trustee, to conduct non-judicial foreclosures. We make sure that all steps of the process are completed on your behalf according to all regulations.
Can I foreclose on defaulted loans on property in any state?
Unfortunately, no. Property is typically subject to the laws of the state in which it is located. Some states require court involvement to foreclose. Other states, like California, allow trustees to conduct non-judicial foreclosures, subject to the state's statutory requirements. TTDSC is currently equipped to handle non-judicial foreclosures on properties in California.
How long does a typical foreclosure take?
From the initial Notice of Default, the entire process can take about four months. However, every situation is different, and the timeline can change depending on factors, such as how much the borrower is willing to work with you.
How long does the loan have to be in default before I start the foreclosure process?
Every situation is different with different requirements as set out by law. Typically, the borrower must be delinquent for between a few weeks to a few months before a lender can start the foreclosure process on the property. Feel free to contact us to find out how long you must wait to begin foreclosure in your specific circumstance.
What are the legal, financial, and tax liabilities associated with foreclosure?
As your trustee, we are not acting as your lawyer or accountant throughout the foreclosure process. We may be able to generalize about how the process works and what we have seen throughout our over four decades of experience. However, we suggest you speak to your lawyer or accountant about your legal, financial, and tax liabilities, as every situation can be different.