Posted by: Catherine | May 30, 2011

You do NOT need a “trustee verification service” company to help you!


So you were dismayed to find the trustee sale letter taped to your front door… maybe you’ve been trying to work with your lender on a loan modification, maybe you’re in the middle of a short sale – or maybe, you’ve done nothing hoping it will all just go away.  We are starting to see these misleading letters all over Contra Costa.  I’ve had clients in Concord, Walnut Creek and Pittsburg receive them recently.

But alas, here comes some HELP! A nifty, official looking letter comes in the mail telling you your trustee/foreclosure sale is coming up next week and eviction will start right away if you don’t call them.  That they are the trustee verification service company and they can validate your sale with the trustee company and in fact, challenge the trustee with lots of mumbo jumbo so they will have to stall the sale.  All this and you can pay them around 900-1,000 a month for the service to stop your foreclosure sale.

What they don’t tell you is that in California, and in standard practice that we’re seeing, the bank doesn’t just show up on your door on the day of sale and evict you onto the streets.  It doesn’t happen that way.  Typically, once the dust settles after the sale, an agent or property preservation company will approach you and try to work with you for a planned and organized move.  The bank doesn’t want you to trash the property, strip the fixtures or force court assisted eviction proceedings.  They want to help you move… they will often offer you “cash for keys” which means you leave the home on the date you say you will, and in good condition, and they will pay you cash…. typically up to $5,000.  (Keep in mind, they can start eviction proceedings right away for an owner of a defaulted/foreclosed property, but it is a complicated and expensive court proceeding for a bank to take on, this is why they’d rather find an amicable solution.)  Remember, if you are the owner of a rental property, your tenants may be eligible for this cash for keys too, and in fact, tenants have MORE rights in a foreclosure than owners often do… think about it… the law assumes that you as an owner, KNEW about the foreclosure, whereas sometimes tenants are kept in the dark until mere days before a foreclosure.  Here is some information about tenant rights in foreclosure: http://www.nolo.com/legal-encyclopedia/renters-foreclosure-what-are-their-30064.html

If you are in the middle of a short sale, or loan modification and you still get a trustee sale notice telling you your foreclosure sale date is set at the court house steps, call your LENDER immediately.  Often, during either a short sale or loan mod, the foreclosure process continues…. very often their foreclosure department is NOT communicating with their loss mitigation or loan modification units – so often it only takes a phone call to stop the sale.   If you are in the middle of a short sale, your agent should be keeping tabs on the sale dates, notice dates and YOU should be telling the agent the minute you get a certified letter or a notice taped to your door.

But be very careful.  While these companies may be adhering to the “letter of the law” by not charging advanced fees, and having all the proper disclosures – they are still a company preying on public notices, and preying on those in peril.  They go after those who are about to lose their homes, and they DO try to scare you by insinuating an eviction is coming.

When in doubt, you can always call the State of California Attorney General office – I did recently when one of my clients received one of these misleading letters.  They have a website set up for loan and foreclosure fraud:  http://ag.ca.gov/loanmod/ .

You do not have to pay anyone to help you stop your foreclosure, you can do this yourself by cooperating with your lender, communicating with your lender and when necessary enlisting the services of a professional realtor to sell your home if a short sale is your goal.  ALWAYS seek the counsel of an attorney and CPA before proceeding with any loan modification, short sale or other “foreclosure rescue” solution.  Remember, a real estate broker (like me) is not affiliated with the government, and not affiliated with your lender.  If you choose to do business with me, or any realtor/brokerage, you can cancel the agreement at any time and not owe any money.  You should NEVER, EVER be charged money up front for any service.
Here are some tips to stay safe from the California State Attorney General:

5 Tips to Avoid Being Scammed

  1. Don’t pay up-front fees. Foreclosure consultants are prohibited by law from collecting money before services are performed.
  2. Don’t ignore letters from your lender or loan servicer. Responding to those letters is your best bet for saving your house.
  3. Don’t transfer title or sell your house to a “foreclosure rescuer.” Beware! This is a scam to convince homeowners they can stay in the home as renters and buy their home back later. It might also be part of a fraudulent bankruptcy filing. Either way, a scammer can then evict the victim and take the home.
  4. Don’t pay your mortgage payments to anyone other than your lender or loan servicer. Mortgage consultants often keep the money for themselves.
  5. Never sign any documents without reading them first. Many homeowners think that they are signing documents for a loan modification or for a new loan to pay off the mortgage they are behind on. Later, they discover that they actually transferred ownership of their home to someone who is now trying to evict them.

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