need a payoff from property purchased at trustee sale

[Rachel Zhang]

Hello, 

We bought a property in CA at a trustee sale with an existing senior lien under the previous owner's name. Now my title company and are having difficulty in obtaining payoff amount. By standard, the serve company requires the lien holder's SS /loan # or authorization to release payofd. Even through I faxed over the trustee's deed upon sale, the reps won't understand or do not care, always give me the standard response. Shall I try different title company or have difficult strategy? By law, when i am on title, I am responsible for the lien, which should serves as an authorization. Right? are there any specific language in the mortgage or the law code to indicate such? The lien is delinquent, and I am offering to pay it off. where wont' they give to me? Talking to the rep at the serve company is like talking to a wall. They are not educated or do not care to be educated.  Thanks for your response.  Rachel

[Account Closed]

@Rachel Zhang  Be mindful that your desire to payoff the loan is not as motivating to the lender as you might assume. While the lender wants to be paid, they don't have systems in place to allow a successor-in-interest to waltz in and make a payoff. What is in place is lots of liability issues.

In two cases I bought subject to senior liens where the lien holders would not provide me with the lawfully required beneficiary statements (Civil Code 2943 et seq.).  In one case I made six separate demands, all 30 days apart.  The penalty in the civil code to the lender for not complying within 21 days is $300. That's not enough of a penalty to create an incentive for complying, especially compared to the liability to the lender of accidentally providing loan info to someone other than the borrower. So in those cases I got authorization to release docs signed by the borrowers.  I had to pay them though.  Since you bought at foreclosure sale, the borrower may or may not be willing to cooperate.  But it's worth a try and makes all the difference when working with the lender. You would have to find the borrower, explain the situation and arrange for payment in exchange for a signed authorization.

The other thing that worked was having the escrow officer use the lender/servicer's automated phone system.  If you have the borrower's SS# and loan #, that may be enough to generate the payoff demand.

If the senior lien goes into foreclosure (after the notice of default is filed), I find the foreclosing trustee services to be better (and faster) than the lender at dealing with successors-in-interest. It may be because they have more experience with payoffs from buyers at trustee's sale. It's not ideal because once a lender files the NOD there will be additional fees. But you're looking at additional legal fees anyway if you have to hire an attorney to help you get the payoff.