How do I start a foreclosure?

To start a foreclosure with C&H Trust Deed Service, you will need to provide copies of your Note, Deed of Trust and any assignments or other documents that pertain to your lien interest.  You will also need to complete our order form, which is here. This form simply requests that we start a foreclosure on your behalf and contains important information about your loan. 

Are there any other forms which I must fill out?

Yes, in most cases, you will need to sign a form called a “Substitution of Trustee”.  Our office will prepare the document and send it to you shortly after the foreclosure file is opened.  You will need to sign and record the Substitution of Trustee form and mail the original back to our office.  Once recorded, this document identifies C&H Trust Deed Service as the new trustee with authority to prosecute the foreclosure on your behalf.   

What will it cost me to begin foreclosure proceedings?

There is no initial deposit required. All our fees and costs are added to the debt and are usually paid by the property owner when they reinstate or payoff the loan or if the property is ultimately sold at foreclosure sale.  You will only be required to pay our fee if you cancel the foreclosure after it has been started or if you become the new owner at the foreclosure sale.  Our fees are typically 1% of the total debt amount plus processing costs (title insurance, recordings, mailings, publication, posting, etc.).  Please call for a precise quote of the costs involved.

Is there anything I must do once the foreclosure has been started?

No.  C&H Trust Deed Service is a full service company.  Once you have turned the foreclosure over to us, you never have to contact your borrower again.  The only exceptions to this are any contacts made directly to you by the borrower.  The most important of these are attempts to make payments directly to you.  If you should receive any payments from the borrower, you must immediately forward them to our office.  We will contact the borrower and explain why the payment cannot be accepted and what he/she must do to “cure” the foreclosure.  You will receive copies of all the correspondence between C&H Trust Deed Service and your borrower.  This is possibly the most important instance where you should not attempt to deal with the borrower directly.  Should you, or any collection agency acting for you, such as a bank collection department, accept payments from the borrower, the foreclosure may be invalidated and you would be responsible for payment of our fees. 

In general, your responsibility after turning the case over to C&H Trust Deed Service are to keep us informed of any advances you have made (property taxes, insurance, etc.) and to refer the borrower to us should he/she contact you directly.  Should you have any contact with your borrower, it is also helpful for us to know what your conversation was about and what promises, if any, were made by either party.  C&H Trust Deed Service will take no action without first making sure you fully understand how you will be affected. 

How long does the foreclosure take?

You can usually expect that the foreclosure proceeding will take approximately four (4) months from the date of recording the Notice of Default.  Most borrowers stop the foreclosure before the sale by reinstating or refinancing the property to pay the loan in full.  The time schedule is as follows: 

--    THE REINSTATEMENT PERIOD: Starting with the date the Notice of Default is recorded, there is a three (3) month reinstatement period. During this period, the borrower may reinstate the loan by paying all delinquent mortgage payments, late charges, advances, foreclosure fees, etc..  Prior to any reinstatement, our office will audit the file to ensure that the borrower pays all charges due on the loan. 

--   THE REDEMPTION PERIOD: The redemption period is a twenty-one (21) day period when the Trustee’s Sale (public auction) is scheduled and published in a newspaper for three (3) consecutive weeks. The borrower can still reinstate the loan up to five (5) business days before the scheduled auction date. You, as the beneficiary, can agree to allow reinstatement at any time prior to the sale. 

How does the foreclosure sale work?  
 
A Trustee’s Sale is an open public action and anyone who appears with a cashier’s check or cash equal to the opening bid and any over bid may participate.  C&H Trust Deed Service will represent you at the Trustee’s Sale.  Prior to the sale, we will contact you to determine our bidding strategy.  The minimum bid, or “opening bid”, is a credit bid on your behalf and usually covers all monies owed to you along with our fees and costs.  If an outside bidder presents cashier's checks in an amount not less than the designated opening bid, they will become the new owner of the property.  You can also try to acquire the property by depositing additional funds with C&H Trust Deed Service for use as a "proxy bid".  C&H Trust Deed Service would then use these funds to bid against any outside bidder up to your pre-determined amount.

It is impossible for C&H Trust Deed Service to know prior to the sale what may occur or whether or not third party bidders will be present at the auction.  After the sale, C&H Trust Deed Service will disburse the sale proceeds to entitled parties and issue a Trustee’s Deed Upon Sale to the successful bidder.  After issuance of the Trustee’s Deed Upon Sale, the foreclosure is complete.

What if the borrower files a lawsuit or bankruptcy?
 
Unfortunately, some borrowers try to delay the foreclosure with lawsuits challenging validity of the loan or foreclosure or by filing bankruptcy.  In either instance, C&H Trust Deed Service maintains two in-house attorneys for any such litigation or bankruptcy challenges.  These attorneys are available to you at all times and will advise as to your available remedies.  Any attorney fees incurred by you are added to the total debt and recoverable at the Trustee’s Sale.