Effect of Filing Bankruptcy After Trustee's Sale But Before Recording of Deed
Posted: Wed Feb 03, 2010 11:54 pm
You may want to take a long look at CEB's California Mortgage, Deed of Trust and Foreclosure Litigation (4th Ed 2009), in particular Sections 2 and 7, where there is a discussion on some of these issues. The issues are complex, involving the race notice statute, and California's foreclosure statute as it relates to the foreclosure and effective time of the foreclosure and effective date of the recording of the trustee's deed upon sale.
Judge Bufford had a written decision, Tome, to which the California legislature passed revisions to the foreclosure statute to give effect to a trustee's deed upon sale recorded after a bankruptcy, but relating to a sale that took place before. You may want to research that case and the cases or statutes citing to it.
An oral warranty to postpone the sale without either written confirmation from the lender or foreclosure trustee, or a written notice to the lender and foreclosure trustee that an oral warranty was made upon which there is reliance, is not a very winnable issue for litigation. Your client's chances may be better if no third party took title.
Lou Esbin
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> I have a potential client who was going through the loan mod process and received a notice of trustee's sale. The lender agreed to postpone the sale but it happened anyway. The Trustee's Deed Upon Sale has not been recorded yet as the lender is aware of the problem and referred it to the legal department. I don't think that the Deed could be recorded if a bk is filed as it would violate the stay but what is the PC's interest in the property as it stands now? Thanks.
> Cameron
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