How Does a Lender Start a Trustee’s Sale?

An initial retainer check of $1,500 to $2,500 (for residential) and $3,500 to $10,000 (for commercial) is required to open each foreclosure file, initial discussion with client and initiate each trustee’s sale demand.  This fee is considered attorney fees and it not part of the trustee’s fees, nor does it include the costs for the attorney or trustee’s sale process.  The basic fee is non-refundable, but if the matter becomes contested (such as bankruptcy or litigation) we will bill hourly.

---

Required documents:

1. Deed of Trust (signed)
2. Promissory Note (signed)
3. Assignments of Beneficial Interest (if any, signed)
4. Any agreements to modify the loan (whether signed or oral)
5. Accounting – either from servicer or you
6. Leases (if any, signed)
7. If the lender is an entity, then a resolution allowing this firm to conduct a trustee’s sale.
8. Retainer fee and signed agreement.

---

How to Start the Process: Once we receive this information and the initial retainer we will open a file, send the borrower(s) a demand letter to, and wait 10 days, or the period set forth in the deed of trust, which ever is later. If the borrower(s) does not pay within that period we will move to the next step – starting the trustee sale.  If this process goes to a trustee’s sale there will be additional fees and costs – which start at approximately $2,500 (for small residential loans, but can more expensive depending on expenses and principal owed) .  Contact our office for quotes on commercial property or residential debt above $200,000.

---

The trustee sale process. After we receive this information we will prepare documents for your signature. We cannot start the trustee’s sale process until those documents and a retainer have been returned to our office, a title report received and an accounting obtained from you or your servicer.

Not including the initial file set up and demand to the borrower, the process takes at least 95++ days to complete, assuming there is no contest to the sale (such as bankruptcy or law suit).

---

VERY IMPORTANT NOTES:

IT IS EXTREMELY IMPORTANT THAT YOU KEEP CURRENT ALL PAYMENTS TO SENIOR LIEN-HOLDERS.

MAKE SURE THAT YOU KEEP TRACK OF ALL MONIES YOU SPEND AS RELATED TO THIS PROPERTY. IF YOU EXPECT TO RECEIVE A REFUND OF THESE MONIES YOU MUST INCLUDE THEM IN THE CREDIT BID WE WILL ASK FOR AT THE END OF THE TRUSTEE’S SALE.

ONCE YOU SEND THIS INFORMATION TO OUR OFFICE YOU ARE NOT TO NEGOTIATE PAYMENT WITH THE BORROWER WITHOUT FIRST CONTACTING US TO DISCUSS THE PROBLEMS ASSOCIATED WITH ACCEPTING SUCH PAYMENTS.

REMEMBER: AS THE LENDER YOU DO NOT OWN THE PROPERTY. INSTEAD YOU OWN THE NOTE AND ARE THE BENEFICIARY (LENDER) UNDER THE DEED OF TRUST.

IF BANKRUPTCY IS FILED IT WILL CAUSE THE CURRENT PROCESS TO STOP OR BE POSTPONED, DEPENDING ON THE CIRCUMSTANCES.  THIS OFFICE IS ALSO A BANKRUPTCY FIRM.