Trust deed sales are a type of foreclosure where the trustee sells the property on behalf of the lender without court oversight. The trustee is an impartial third party, and the sale occurs about four months after a notice of default is posted. Trust deeds are agreements between borrowers, lenders, and trustees, and the trustee holds the title to the property. If the borrower defaults, the trustee can sell the property, and the proceeds go to the lender to settle the debt. The sale is not supervised by the court, and there is a risk of future property title disputes.
Selling a trust deed is a type of foreclosure that is not overseen by the court system. The sale of the property is handled by a trustee, who is empowered to sell by the mortgage lender. The trustee is considered an impartial third party. Sales of the trust deed usually occur about four months after a notice of default is posted.
Some local jurisdictions use a trust deed in place of a traditional mortgage. Trust deeds are an agreement between a borrower, a lender, and a trustee. When borrowers receive money from lenders to purchase a home, they give legal title to the property to an impartial trustee. To protect the lender’s interest, the title is held by the trustee, who is named as the beneficiary.
The borrower will retain ownership and legal rights to his title if the debt is paid in a timely manner. If the borrower defaults, the trustee can sell the property in a trust deed of sale. Similar to a judicial foreclosure, the proceeds from the sale are first paid to the lender to settle the outstanding debt, with the borrower receiving the excess funds.
The sale of a trust deed is not supervised or registered with a court. The trustee files a notice of default in the county or municipality where the property is located. The borrower has 90 days to respond and settle the outstanding debt. If the debt is paid by the borrower, the trustee cannot proceed with the sale.
After 90 days, a trust deed is expected to be sold. The sale usually takes place in the county or municipality where the complaint was filed. Even if the courts do not uphold trust deed foreclosures, they are conducted in a public setting. The trustee must send the property at least 20 days before the sale.
In addition to posting a notice that the property is in foreclosure, the trustee must also post a notice of the impending sale of the trust deed in the newspaper 30 days in advance. In order to meet the minimum requirements, the sale notice must be published in the newspaper at least once a week for three consecutive weeks.
During the sale, the property is being sold in an auction style format. Due to the absence of judicial approval, there is a risk of future property title disputes. If at any point during the foreclosure proceedings the borrower files for bankruptcy, the sale of the trust deed cannot proceed.
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