Frequently Asked Questions
Foreclosures are started due to a breach of the borrower’s obligations under the note or deed of trust. The two types of breaches are monetary or non-monetary. Examples of monetary breaches include the failure to make the monthly payment or the balloon payment when they are due. Examples of non-monetary breaches include failing to maintain insurance, allowing the property to deteriorate, or transferring a title.
No, you do not. Foreclosure should always be your last choice when all other avenues have been exhausted. Often, a simple phone call to the borrower can resolve the problem without the need for foreclosure. Depending on the borrower’s circumstances, you may be able to enter into a loan modification or forbearance agreement to ensure that you get paid.
It will depend on the type of loan and what the note and deed of trust state. In most cases, for a monetary default, the foreclosure can usually begin after the grace period ends (however in some consumer loans, there is a federal law requiring a 120-day waiting period following default before the lender can commence the foreclosure). In the case of a non-monetary default, the loan documents usually require the lender to give the borrower notice of the breach and an opportunity to cure the default.
All the trustee’s fees are set by statute and are based on the unpaid principal balance of the loan at the time we start the process. In addition to the trustee’s fees, the costs involved include a trustee’s sale guarantee (title product), recording, posting and publishing fees, and mailings. Please call us for an estimate of the costs and fees for your particular matter.
The length of time varies by state. In Arizona, the process takes approximately three (3) months. In California and Nevada, the process takes approximately four (4) months. In Texas, the process usually takes less than two (2) months.
Not necessarily. The culmination of a foreclosure is a public auction where the property is sold to the highest bidder. If no one bids at the sale, the lender becomes the owner of the property.
We will offer the property for sale to any party that qualifies to bid. The lender will typically set the price at the total amount owed to the lender as of the date of sale, plus the trustee’s fees and costs (but the lender can accept less depending on the property valuation and other factors). If no one bids on the property at the auction, then the property is deeded to the foreclosing lender who becomes the property owner. If someone bids above the amount owed to the lender, the lender gets paid, and that third-party bidder becomes the owner.
For a limited period of time after the foreclosure begins, the borrower has the absolute right to bring the loan current (if the loan has not matured) once the foreclosure has started. This is called reinstatement. If the borrower wants to reinstate, the borrower has to pay all the missed payments and advances to the lender and pay the trustee’s fees and costs to date. The lender can always choose to accept reinstatement after any statutory time period expires.
TLS currently conducts nonjudicial foreclosures throughout Arizona, California, Nevada, and Texas.