HOW TO STOP A TRUSTEE SALE
(This is not legal advice. This is purely for informational purposes)
There are a number of ways to stay or stop a sale date.
1) Submit for a Loan modification and a postponement of the sale.
2) Declare a bankruptcy Chapter 13,7 or 11, for the purpose of delaying the sale.
3) Lender Litigation: File a civil action, sue your lender, and get a Temporary Restraining Order or an injunction.
4) Postpone Trustee Sale using the Trustee Sale Verification Delay Process
5) Cure the full indebtedness. Pay back the full arrears.
6) Arrange a forbearance agreement. Partial payment on arrears over time. With agreement to postpone.
7) Put the house in “Short Sale” and request a sale date postponement.
8 ) A combination of some of the above.
1) Loan Modification: A submission/request for loan modification in the lender’s loss mitigation department combined with a request for postponement can delay a sale date from 30-120 days. This method may require many requests for postponement while a submission is being reviewed by your lender.
2) Bankruptcy: File a Bankruptcy either in Chapter 13, 7, 11 will put an automatic stay on a foreclosure. The lender can then file for a Relief from Automatic Stay to be relieved from the stay. But in most cases this can take many months.
3) Lender Litigation: The other strategy to stay a foreclosure action is using a law suit and sue your lender(Beneficiary). As a borrower you have the right to challenge the bank to produce proof of claim before they can proceed with the sale. Also to contest aspects of the foreclosure process and the validity of the note and the cause of the late payments e.g. inducement.
The Trustee (Attorney for the Lender in the Sale action) is not obliged to stop the sale unless:
a) The court orders a preliminary injunction or a temporary restraining order
b) The Trustee is made personally liable for the action through a Notice of Cease and Desist.
If you have filed a civil action. With the case number, you can create a document a Lis Pendens is created which can be filed at the County Recorder’s office. This notices all parties that there is a legal issue with the title. This will likely stop any buyers from considering the property. It will not prevent the bank from fighting to claim the property however. The Lis Pendens and Notice of Cease and Desist should be sent to the bank and Trustee.
If the Trustee does not comply, then you will need to name them in your civil action. The Trustee is now fifty percent liable for damages if you prevail.
c) A Temporary Restraining Order (TRO) may provide a short delay in the process. This is at the discretion of the Court. The Civil Case must be of valid standing in the eyes of the court. (A substantial likelihood of success in the matter).
4) The Trustee needs to have signed foreclosure paperwork with the County Recorder’s Office before the sale can be consummated. A request for the proper paperwork can be requested. In the case of a pending civil action, the Trustee can be subpoenaed to testify that the foreclosure is valid. This can cause further delays. Until this is resolved the house sale might be delayed.
5) A request for the full reinstatement of the arrears on the loan can put the loan in good standing. However there are cases where the lender will only allow full payment of the entire loan balance and arrears in order to stop their foreclosure action.
6) A forbearance agreement is an agreement with the lender to make a “good faith” payment arrangement on top of your original payment to bring the loan current. This is at the discretion of the lender.
7) Put the house in “Short Sale”: If the house is upside down in value as is common a short sale may be the best alternative to losing the house in a foreclosure. A Short Sale can delay a foreclosure for many months as details of the transfer are worked out.
8 ) A combination of the the above: Many borrowers are in a combination of many of the above. They are in Bankruptcy while trying to get a Loan Modification. They are in Loan Modification and litigating the lender at the same time (Carrot and Stick). They are in Short Sale and Bankruptcy at the same time. Even occasionally borrowers are Litigating, in Bankruptcy and in Loan Modification all at the same time.
