Re: Former owner buying house at trustee sale

Quote
MTI
Anyone know the legalities of an owner in foreclosure bidding on and buying their home at the trustee sale in ca? In this particular case we have heard the former owner will be bidding on a house he is losing (owes 2.8 and opening bid is 1.2). He may be using someone else to bid on his behalf for his llc. I know title companies wont insure, but I dont think this guy is too worried about that. Also, could we purchase the property and then sell to them (cash no title insurance) or is that potentially illegal too?

In CA, like most other states, if a debtor purchases his property as the highest bidder at the foreclosure auction of the premises, then all the wiped-off liens will automatically reattach to the property's title by operation of law. However, if he's cagey enough to buy the auctioned property in an entity–such as a trust, an LLC, etc. instead of in his name, then he would escape the reattachment of the expunged liens. But he has to remember to never put the title of the property back in his name ever again.

--------------------------Ward

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