Need advice on Trustee Sale from HOA lien holder, (California, Los Angeles County).

[Veronica V.]

My mother received a Notice of Trustee's Sale from the HOA association for arrears and expenses in excess of $10,000 and it is scheduled for auction in a couple of weeks. At the moment her mortgage is $50,000 over market value and although the bank offered her a restructure, she refused to accept it. She just wants out. There are no other notes on the property. She is also in arrears with her mortgage but the bank has not moved forward with any foreclosure to date. It may be because I have been making payments on her behalf for the past 6 months, hoping she would change her mind and accept the offer the bank made.

Now this Trustee Sale has thrown me for a loop. I need advice on what to do. I would like to keep the property in the family. Can I go to the auction myself? If I go and win the auction, what would be my position with the property? I’ve never been to a Trustee’s Sale so your looking at a novice/amateur. I don’t even know what the likely hood of winning would be. And if I don’t go and nobody else bids, what happens then? Does the property still stay in her name?

Any advice would be greatly appreciated.

[Wayne Brooks]

This may be state specific, see an attorney! But generally, either a 3rd party will be high bidder, or the HOA will be. In either case your mother will no longer be the owner and will likely have to start paying rent, or be evicted. The mortgage stays with the property, and the bank will foreclose against your mother and whoever the new owner is. There may not be personal liability for the mortgage note balance, if it is a non recourse loan. She probably will be liable for the HOA unpaid balance.
See a local attorney!