foreclosure

Published on: December 19, 2009

What happens to California Real Property Tax When the Lender Forecloses, and Does The Homeowner Still Have to Pay the Tax?

What happens to unpaid property tax when a mortgage lender forecloses?

The payment of ad valorem real property taxes is secured by a lien on the assessed property. The tax lien is senior to other state tax liens and federal tax liens that take their priority from the date of recording, and it is senior to all other liens on the property regardless of the time of their creation- this includes the mortgage deed of trust.

Thus, because the property tax lien is superior to the mortgage lien, on the foreclosure of a deed of trust, the buyer takes title subject to all property tax liens assessed against the property, whether the assessment was levied before or after the deed of trust was recorded. The buyer at the trustee’s sale must pay the delinquent taxes together with all penalties in order to clear title. Whether or not the penalties have the same priority as the tax lien is not relevant. The only way of redeeming and preventing a foreclosure sale of the tax lien is by payment of the penalties

Published on: December 14, 2009

California Residential Foreclosures- Is your loan non-recourse, or will you remain personally liable for the debt?

by Law Office of James J. Falcone

California anti-deficiency laws provide that on foreclosure the lender only gets the home- they can not get the balance of the loan from the homeowner. The purpose is to place the risk of inadequate security on the lender, whether due to overvaluation or market decline. It is intended to discourage speculative land sales and the overvaluation of properties.

When faced with foreclosure, the homeowner needs to consider several issues that may impact whether they will have personal liability. What follows are five steps to follow in determining how the anti-deficiency laws apply in your case. They are the five most common issues that arise. For our purposes, reference to “foreclosure” includes exercise of the power of sale in the deed of trust.

Disclaimer: The content of this comment contains general information based on California law and is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You will require specific legal advice and should not rely on general information provided here. You should consult with an attorney to discuss the matter and for any specific legal advice.

Published on: December 1, 2009

Trustee at Foreclosure Sale Reads the Wrong Street Address, Buyer thinks he gets a Windfall, but the Court Allows the Trustee to re-Auction the Property— When a Trustee Can Get off The Hook for his Error.

by Law Office of James J. Falcone

In a recent California decision, the trustee was holding a sale of a Sacramento property. The auctioneer read from a script which had all the correct information, including the legal description of the property, but gave an Arcola Avenue street address, which was not the same property. The Arcola sale should have had an opening bid of over $300,000, but the bid here started at $50,000. A buyer seeking the Arcola property won the auction, thinking it got a great deal on the property; the Court said no.

Under California law, trustee’s sales are required to strictly follow statutory procedure. Inadequacy of price alone will not justify setting aside the sale. However, gross inadequacy, plus even slight unfairness or irregularity is sufficient to set aside the sale.

Here, the auctioneer announced the legal description and starting bid for one property, while announcing the street address of a different property, which the court found created a fatal ambiguity in determining which property was for sale. Thus, it should be set aside.
(Millennium v. TD Service Co. (2009) Cal 3DCA C059875)