I moved to California in 1987. Those who lived here at that time might remember that real estate prices were escalating rapidly in the late 1980’s. We bought our first house in 1989 – and we paid our seller almost exactly double the price he had paid 5 years earlier. It was a heady time – real estate prices were on the rise, and it looked like there might be no end in sight.
With such rapid price escalations, few people thought about foreclosures – except the lawyers. Two of the first legal matters I ever worked on were judicial foreclosures on real estate investments that had gone bad in the early 1980’s. But after working on those foreclosure matters in the late 1980’s, I never even touched another foreclosure matter until now. In the past, a borrower who couldn’t make their payments wouldn’t foreclose – instead, they would sell at a profit. Frankly, it was difficult to not make money. It seemed for a time that anybody who could manage to get a hold of property would make money – and everybody on title looked like financial wizards.
Those days are over – for now. In the late 2000’s, foreclosure became a common reality. And as a result, public interest in foreclosure law grew exponentially. Ten years ago, very few people had any interest in foreclosure law or proceedings. But that changed.
Foreclosure law is complex. There are many, many fine points involved in foreclosure law and proceedings, and even some of the major points of law are not well understood. As a result, borrowers do well to obtain competent, qualified legal advice when they are faced with a foreclosure prospect.
The document that starts a formal non-judicial foreclosure proceeding is known as a “Notice of Default.” This Notice is recorded in the county records of the county where the property is located. California law requires specific language to be included in the Notice of Default. The law that contains this language is known as California Code of Civil Procedure 2924c.
One of the fine points about foreclosure law that is not widely know is that anybody can request and receive a copy of a recorded Notice of Default. California law requires that a person who borrows money and signs a Deed of Trust must receive a copy of any Notice of Default in the mail. But anybody else who wants to receive a copy of such Notice of Default can request one. Any person can record a Request for a copy of any Notice of Default in the County Recorder’s Office. If this Request is properly prepared and recorded, then a copy of the Notice of Default is supposed to be sent to such a person when a Notice of Default is recorded.
Why, you may ask, would anybody other than the borrower want to know that a foreclosure is starting on a given parcel of property? There can be several reasons. For example, California law allows one person to guarantee the debt of another. Such a “guarantor” may want to know if the loan they have guaranteed has gone into default. Also, there can be other creditors who may be interested in knowing if the holder of a certain Deed of Trust is commencing foreclosure proceedings.
In order to be effective, a request for a Notice of Default must be recorded before the Notice of Default is recorded. But if such a request is timely and properly recorded, then the person who recorded such a request is supposed to receive in the mail a copy of any recorded Notice of Default.
The California statute that provides for requesting copies of Notices of Default is known as California Civil Code 2924b. But persons wanting to receive copies of Notice of Default would do well to consult legal counsel in connection with the preparation and recording of such a Notice.