many times Lenders will use companies that specialize in processing foreclosures. So they substitue in another trustee (or company) in order to have them do the foreclosure on the lenders behalf.
I, your friendly Real Estate Investor buy a note and deed of trust from someone who sold a property and took back a lst TD. time passes he wants money. I give him the money and then I call up my favorite trustee, you know the one that will do whatever I, the newly assigned Beneficiary wants him to do. I, the new Beneficiary now fill in a Subsitution of Trustee form and that appoints him Trustee. It is recorded.
Sure enough, just as I knew he would the Trustor (Borrower) stops making payments. I must now foreclose. My new Trustee starts the foreclosure.
One of the biggest reasons to substitute Trustee is so you can control the foreclosure sale.
The sale is scheduled you look around and you see the Israeli Syndicate, the Chinese Syndicate.You do not want them to get the property. You want the property. You postpone the sale. They go away and sometimes they do not come back. It is at that moment you hold the sale and you get the property. Sometimes you postpone the sale several times.
This is but one of the many variations you play and it starts by Substituting the Trustee. Besides, it is profitable. You get all those fees which thank god are set by law. Fees to advertise, fees to post the property, fees to conduct the sale.
The Trustees job requires great talent you must be able to talk. "How much am I offered and by whom?" English is preferable. But, not a requirement..
Of course after the sale, there is a Trustees deed to record to the new owner. I am sure most of you can see the various little games that can be played.
For instance. You postpone the sale and negotiate the purchase at heavy discount of a second that is sitting behind the note you are foreclosing.
There is so much equity that the bidders will be bidding like crazy. But if you can buy at discount that second say for 10 cents on the dollar. Yip, you are bidding with 10cent dollars and that allows you in most cases to overbid everybody in the business.
You go up to the date of sale and then start bargaining for the second. With the pressure of a foreclosure sale only one day away you should be able to buy it at a really substantial discount.
Supose you are just interested in money in which case you just keep on bidding up with your 10 cent dollars until the opposition at the sale begin to falter. So you stop and they get the property and you rake in a goody profit.
There are many many variations. I could be here all night. Maybe I ought to write an article on How to Profitatize the Trusteeship.
There was a bidder some time ago who was following a foreclosure sale in Glendale, the sale was postponed each time he arrived and qualified. He was very very annoyed. He threatened to sue the Trustee.
Only one problem, not owning a note or any position in title he was not a party to the foreclosure. Thus could not file an action.
The sale was held. The successful bidder then called upon the man that wanted to buy and offered to sell him the property at its full value. This price was just about double the amount of the foreclosure sale.
He was forced to buy the property. Seems he had a business and had just been red tagged for lack of proper parking. The property being foreclosed was the property next door which included parking.
Someone did a lot of research, bought the note, subsituted trustee and bought the second behind for 10 cents on the dollar and ran it all the way and by virtue of the discounted second was able to outbid all others.
dear lufous cancelling the sale to get rid of potential bidders is called chilling the bid...the penalties include huge fines and prison time.....although you can cancel the sale for good cause such as bankruptcy, trying to rework with the debtor, etc..[ Edited by lp1 on Date 02/09/2004 ]
Canceling the sale "Chilling" is of course a very bad thing to do if your only purpose is to prevent proper preventative bidding. It is done in the real world almost on a daily basis. the excuses used are numerous and sometimes very creative. However to bring an action it is rather important to be a party to the sale. Just wanting to bid is not enough you are in no way an injured party.
Another also very common event is when a foreclosure sale is being conducted to remove liens and judgements. It is true that IRS and in Calif the Franchise Tax Board are extended a period of time in which to come in and buy the Trustees Deed. I have never seen it happen in the last 25 years. I believe there was once a case some time before that but that was in an enormous valued property something like $10,000,000.
I have watched these sales for many many years. I have seen titles cleaned, liens wiped. title perfected by elimination of any possibility of an unrecorded documents whatever. I make no moralistic judgements. It is my belief that they are necessary evils of the mercantile society. I live within that society and I do my best to conform within it. These acts are indeed small in comparison to the larger acts which are almost a daily occurance in the stock and bond markets of the world.
I would say that the mud and slime of an evil time are much reduced in the field of real estate.
As Trustee I have never been a party to a law suit directed against that activity. In conjunction with such activities I have only appeared in court on a single occasion and that was when a bidder tried to qualify with a falsified cashiers check. Now that was a no no. He was prevented from bidding. The check was confiscated by the Trustee at time of tender. Title Insurance and Trust Co Trustee.
I am not an expert but generally it is where a lender farms out the forclosure process to a secondary company the specializes in the process.
If the note is not in arears it is simply where a loan has been sold to another mortgage company.
many times Lenders will use companies that specialize in processing foreclosures. So they substitue in another trustee (or company) in order to have them do the foreclosure on the lenders behalf.
But, is this like another lien or something?
no nothing like another lien. It is like they hired another company to collect on the 1st or which ever they replaced...
ok, I think I got it now. actually the word itself kind of says it but, these real estate terminology sometimes are tricky. Thank you for your help.
Substitution of Trustee.
I, your friendly Real Estate Investor buy a note and deed of trust from someone who sold a property and took back a lst TD. time passes he wants money. I give him the money and then I call up my favorite trustee, you know the one that will do whatever I, the newly assigned Beneficiary wants him to do. I, the new Beneficiary now fill in a Subsitution of Trustee form and that appoints him Trustee. It is recorded.
Sure enough, just as I knew he would the Trustor (Borrower) stops making payments. I must now foreclose. My new Trustee starts the foreclosure.
One of the biggest reasons to substitute Trustee is so you can control the foreclosure sale.
The sale is scheduled you look around and you see the Israeli Syndicate, the Chinese Syndicate.You do not want them to get the property. You want the property. You postpone the sale. They go away and sometimes they do not come back. It is at that moment you hold the sale and you get the property. Sometimes you postpone the sale several times.
This is but one of the many variations you play and it starts by Substituting the Trustee. Besides, it is profitable. You get all those fees which thank god are set by law. Fees to advertise, fees to post the property, fees to conduct the sale.
The Trustees job requires great talent you must be able to talk. "How much am I offered and by whom?" English is preferable. But, not a requirement..
Of course after the sale, there is a Trustees deed to record to the new owner. I am sure most of you can see the various little games that can be played.
For instance. You postpone the sale and negotiate the purchase at heavy discount of a second that is sitting behind the note you are foreclosing.
There is so much equity that the bidders will be bidding like crazy. But if you can buy at discount that second say for 10 cents on the dollar. Yip, you are bidding with 10cent dollars and that allows you in most cases to overbid everybody in the business.
You go up to the date of sale and then start bargaining for the second. With the pressure of a foreclosure sale only one day away you should be able to buy it at a really substantial discount.
Supose you are just interested in money in which case you just keep on bidding up with your 10 cent dollars until the opposition at the sale begin to falter. So you stop and they get the property and you rake in a goody profit.
There are many many variations. I could be here all night. Maybe I ought to write an article on How to Profitatize the Trusteeship.
There was a bidder some time ago who was following a foreclosure sale in Glendale, the sale was postponed each time he arrived and qualified. He was very very annoyed. He threatened to sue the Trustee.
Only one problem, not owning a note or any position in title he was not a party to the foreclosure. Thus could not file an action.
The sale was held. The successful bidder then called upon the man that wanted to buy and offered to sell him the property at its full value. This price was just about double the amount of the foreclosure sale.
He was forced to buy the property. Seems he had a business and had just been red tagged for lack of proper parking. The property being foreclosed was the property next door which included parking.
Someone did a lot of research, bought the note, subsituted trustee and bought the second behind for 10 cents on the dollar and ran it all the way and by virtue of the discounted second was able to outbid all others.
Now thats what a Real Estate Investor does. Lots of fun an oh yes Profitable.
Gurgling er chuckling Lucius
dear lufous cancelling the sale to get rid of potential bidders is called chilling the bid...the penalties include huge fines and prison time.....although you can cancel the sale for good cause such as bankruptcy, trying to rework with the debtor, etc..[ Edited by lp1 on Date 02/09/2004 ]
Canceling the sale "Chilling" is of course a very bad thing to do if your only purpose is to prevent proper preventative bidding. It is done in the real world almost on a daily basis. the excuses used are numerous and sometimes very creative. However to bring an action it is rather important to be a party to the sale. Just wanting to bid is not enough you are in no way an injured party.
Another also very common event is when a foreclosure sale is being conducted to remove liens and judgements. It is true that IRS and in Calif the Franchise Tax Board are extended a period of time in which to come in and buy the Trustees Deed. I have never seen it happen in the last 25 years. I believe there was once a case some time before that but that was in an enormous valued property something like $10,000,000.
I have watched these sales for many many years. I have seen titles cleaned, liens wiped. title perfected by elimination of any possibility of an unrecorded documents whatever. I make no moralistic judgements. It is my belief that they are necessary evils of the mercantile society. I live within that society and I do my best to conform within it. These acts are indeed small in comparison to the larger acts which are almost a daily occurance in the stock and bond markets of the world.
I would say that the mud and slime of an evil time are much reduced in the field of real estate.
As Trustee I have never been a party to a law suit directed against that activity. In conjunction with such activities I have only appeared in court on a single occasion and that was when a bidder tried to qualify with a falsified cashiers check. Now that was a no no. He was prevented from bidding. The check was confiscated by the Trustee at time of tender. Title Insurance and Trust Co Trustee.
I hope this explains a little. Lucius