Foreclosure Process as a Junior Lienholder

[avocadoguy]

Hi Everyone, I have a real-estate legal situation and I’m looking for some guidance.

Background:

• I won a $60K judgement against an individual several years ago.
• I filed an Abstract Judgement with the county (Riverside)
• The debtor owns a home in the county worth about $900K with mortgage of about $550K.
• The mortgage is in default. The notice of default was posted, and two days ago the notice of sale has posted with the county registrar.

My questions:

• If this ultimately ends in a foreclosure auction, am I entitled to any of the excess funds after the sale? (E.g. say the property sells for $600K at the auction and $550K goes to the mortgage holder.)
• If so, what specifically must I do to receive any of the excess funds from the foreclosure auction? Do I need to send some sort of demand letter?

I’d be happy to retain a lawyer or real-estate professional who can walk me through this.

Thanks!

[sdrealtor]

You need a lawyer. You need to file a lien on the home

[avocadoguy]

Thanks, for the response.

I have an Abstract Judgement. I know that in California a judgement creditor cannot put a lien on a specific property. The Abstract Judgement is basically a blanket lien on all properties in the county.

My specific concern is how the foreclosure trustee knows who to pay when distributing the proceeds. Do they search the county records, or as a creditor do I need to be proactive and contact the trustee?

Since I’ve posted, I found some answers:

https://www.titleadvantage.com/nonjudicial_foreclosure.htm

https://codes.findlaw.com/ca/civil-code/civ-sect-2924j/

https://www.allenmatkins.com/real-ideas/real-estate-jukebox-don-t-you-forget-about-me-protecting-a-judgment-lien-creditor-s-interest-in-real-property-upon-foreclosure.html

The 3rd link gives me an important answer. I have to notify the County Recorder in “standard form.”

I do have a lawyer that I used to get the judgement, but I was becoming concerned that he didn’t have specific experience with the process of collecting after a foreclosure and I posted here for second opinion (or possibly a new lawyer!)

 

 

 

[evolusdv2]

I second ‘you need a lawyer’. Going it on your own with internet research and Pigg opinions is asking for problems.

[avocadoguy]

Like I mentioned in my previous post, I have a lawyer.

When I told him about the Notice of Default, his response was “the foreclosure probably won’t go through anyway” which had me concerned since it seemed he was just brushing it off.

My internet research is telling me we could have been more proactive and made some of these filings earlier.  There’s still time, but it wouldn’t hurt be be early since there are now hard deadlines with the auction sale coming up.

One of my links is an article from a a law firm saying be careful not to do exactly what my lawyer is doing.

I understand my lawyer is supposed to be the expert, but more than once I’ve relied on experts that were incorrect or inattentive to detail. It happens.

My inquiry here is to meant to check my lawyer’s work, and decide if I need a new lawyer. That would be a hassle this late in the game, but I may have to do it. I’m talking to him this week to find out if he’s really committed to supporting me in this matter.

 

[BKlawyer]

you need a new lawyer. Call a BK lawyer. Foreclosures is all we do all day all night and on weekends too.

[avocadoguy]

I have an update if anyone is interested:

I got with my lawyer and he put together a demand letter for the bankruptcy trustee, but there is a change in direction.

I got a notice from Zillow that the property is now for sale by the lender. I guess the homeowner worked out an agreement with the lender to sell instead of going through foreclosure. It makes sense since the property has quite a bit of equity and I would think they’d get a better price through a regular sale than an auction.

But of course my Abstract Judgement will cloud the title. There are even more Abstract Judgements filed against the homeowner, but dated after mine.

Does anyone have any experience with a sale when there are junior liens? I would expect the seller to contact me and try to negotiate. Any tips or stories would be appreciated.

PS: BKlawyer, your receptionist said you’d call me back. Twice. 🙂

[Author]

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