We have vast experience representing secured lenders in real property foreclosures, receiverships and Real Estate Owned (REO) related matters. In an effort to delay foreclosure or eviction, it is common for borrowers to file lawsuits against their lenders. At Ruzicka & Wallace, LLP, in Irvine, our litigation team is able to expertly defend these cases. In most instances, these lawsuits are disposed of by an initial motion to dismiss and do not make it to trial.
To speak to a dedicated member of our customer service staff or to schedule a consultation with a lawyer, call our firm at 949-467-9185 or toll free at 888-514-1046.
Los Angeles Mortgage Foreclosure and Lender Defense
In California, a foreclosure may be conducted judicially or non judicially. The vast majority of residential foreclosure sales are conducted non judicially.
Judicial Foreclosure
A judicial foreclosure is a lawsuit and involves a court-supervised foreclosure sale. The lender must sue all parties having subordinate interests in the property in order to extinguish their interests upon the foreclosure sale. If successful, the lender will obtain a judgment ordering the sale of the property and the sale will be conducted by a court-appointed levying officer. The principal advantage to a lender in pursuing a judicial foreclosure is that it can obtain a deficiency judgment provided certain requirements are met. Another advantage is the opportunity to have a receiver appointed to collect rent pending completion of the foreclosure.
The principal disadvantage of judicial foreclosure is that it is more time consuming and expensive than nonjudicial foreclosure and the borrower retains a statutory right of redemption for one year following the judicial foreclosure sale.
Nonjudicial Foreclosure Process
- Comprehensive framework — Civil Code Sections 2924 through 2924k provide a comprehensive framework for the regulation of a nonjudicial foreclosure sale pursuant to a power of sale contained in a deed of trust.
- Notice of default and election to sell — Upon default by the borrower under a deed of trust containing a power of sale, the lender may declare a default and proceed with a nonjudicial foreclosure sale. The foreclosure process is commenced by the recording of a notice of default and election to sell. After the notice of default is recorded, the trustee must wait three calendar months before proceeding with the sale.
- Notice of sale — After the three-month period has elapsed, a notice of sale must be published, posted and mailed 20 days before the sale and recorded 14 days before the sale.
- Reinstatement — The statutes provide the trustor with opportunities to prevent foreclosure by curing the default. The trustor may make back payments to reinstate the loan up until five business days prior to the date of the sale, including any postponement. Additionally, the borrower has an equity of redemption under which the borrower may pay all amounts due at any time prior to the sale to avoid loss of the property.
- Manner of sale — The property must be sold at public auction to the highest bidder. The lender may make a credit bid.
- Title — As a general rule, the purchaser at a nonjudicial foreclosure sale receives title under a trustee's deed free and clear of any right, title or interest of the borrower. A properly conducted nonjudicial foreclosure sale constitutes a final adjudication of the rights of the borrower and lender. Once the trustee's sale is completed, the trustor has no further rights of redemption. The purchaser at a foreclosure sale takes title by a trustee's deed. If the trustee's deed recites that all statutory notice requirements and procedures required by law for the conduct of the foreclosure have been satisfied, a rebuttable presumption arises that the sale has been conducted regularly and properly; this presumption is conclusive as to a bona fide purchaser.
Bank Foreclosure Defense — Contact Ruzicka & Wallace, LLP
Our attorneys have the skills, experience and resources to defend you against foreclosure lawsuits. Contact us to schedule a consultation.
