The local company that tracks foreclosures in Ventura County is
www.ForeclosureListService.com. On a daily basis, they track the filings from the Recorders office and publish that data. We get our data from them.

Everybody generically calls the loan on their home a mortgage, but that’s technically not true in California for most of us.  We have a Deed of Trust, or simply, a Trust Deed.  When we borrow money with real estate as collateral, two documents are signed, one a private document (the “note”) and a public document (the Trust Deed).

The promissory note basically is an IOU. It gives the terms of the loan and lots of other stuff, but basically you promise to pay the money back. The note is private in that only you and your lender see it. But beyond your good intention to pay the money back, there’s no real teeth in the note to hold you to your commitment.

So the bottom line is your lender doesn’t trust your good word and intention to pay it back, thus the Trust Deed. It’s a public document, meaning it gets recorded in the Recorders Office for the whole world to see – proof positive of your loan. It’s the teeth to ensure you pay the money back.

In all the words, mumbo jumbo and legalese of the Trust Deed are just four powerful words. “With power of sale”.  Those four words are the teeth in your agreement with your lender. It simply means if you don’t pay up, the lender will start the process of taking your home (the collateral) and selling it – without your permission of course.

You need to know three terms:

• Trustor – that’s you, the borrower
• Trustee – a third party, usually a related company of the lender
• Beneficiary – the lender (the “benny” for short in the real estate world)

Historically, after the trustor stops making payments for about 3-4 months, the Bene will direct the Trustee to start the foreclosure process. The Bene will produce evidence to the Trustee, like when the loan was made, for how much and the arrearages with an “As Of” date. The Trustee then files the first document called a Notice of Default, the first stage of a foreclosure. Real estate people call it the NOD.

Generally, nothing can proceed for 3 months. This gives time for the Trustor to bring the loan current and make everybody happy again. If that doesn’t happen, then things happen fast. The Trustee files the second document called the Notice of Trustee Sale (or the NTS). This document is the teeth of your Deed of Trust. In it, the Trustee sets the time and place of the sale and the minimum bid at the sale. Generally speaking, there has to be a minimum 21 day notice of sale.

If the problem hasn’t been solved, the Trustee will hire an independent “crier” who travels to various counties to physically conduct the sale. Quite frequently in Ventura County, the sales are held at the Hall of Justice, north entrance.

On the day of the sale, the crier publicly reads the pertinent information concerning that property and asks if there are any bidders. Generally, there are no third party bidders (there’s no equity). The lender technically has their bid in place, and if there’s no one else there to bid a higher amount, the property goes back to the lender. A Trustee’s Deed is filed with the County Recorder in the name of the lender.

On the rare occasions when there is equity in a property, a third party may bid on it. Prior to start of bidding, the crier will want to know if anyone present is going to bid on any of the properties that day. Bids at auctions are cash deals (cashiers checks). You must show the crier how much you’ve got. He’ll write it down. You can’t bid any higher than that. So if the minimum bid is $400,000, you’ve got to have that much cash in the form of a cashiers check with you. If you get the bid, you sign the check over on the spot to the crier, and get a receipt. That’s it.

Do not take any of the above as legal advice. Seek competent legal counsel if you’re in (or may become in) foreclosure. I’ve only written in general terms and the laws change from time to time.