My partner and I are in the process of putting together the pieces/figuring out the process to leverage the publicly available information on Trustee Sales and Sheriff's Sales.
Please clarify the difference between the two.
Some areas use a sheriff's sale for Foreclosures, some use the trustee system. Sheriff's also auction other non mortgage foreclosure sales....car loans, private judgment related sales, etc.
A judicial foreclosure almost always will come with a sheriff sale, whereas non-judicial foreclosure usually involves a trustee sale.
A "deed of trust" is the security instrument usually used with the trustee sale, whereas a mortgage is a security instrument usually used in sheriff sales.
State and local laws determine what is used in any given location.
@Chris Stromdahl I see you are in Washington. I am in Oregon. In Oregon we have both sheriff and trustee sales. In Washington it seems you primarily foreclose with a trustee.
A sheriff sale is a judicial foreclosure that includes a 180 day right of redemption. The trustee sale, at least in Oregon and I am quite sure Washington, does not have a redemption period.
With a sheriff sale you pay the money to the sheriff and you have possession of the property but no deed; and you risk losing rehab costs if the place is redeemed within the 180 days. Some people buy the redemption rights but that is another can of worms. With the judicial foreclosure the sheriff issues you a sheriff's deed after the redemption period.
@Steve Babiak ah, I didn't think about the judicial vs non-judicial difference within the same jurisdiction. Thanks for the clarification. Here, all our Foreclosures are judicial.
What determines whether a foreclosure is judicial or non-judicial?
Why would one occur and not the other? In general, what are the determining factors?
For example, are judicial foreclosure a result of missed property tax payments while non-judicial is a result of missed mortgage payments?
@Chris Stromdahl in general you would notice the smaller lenders doing trustee sales and the larger ones doing judicial. In Oregon the courts say you have to be able to follow the chain of title so when they used robo signing, and packaged the loans into pools, and then sliced and diced them in different areas they can't be easily traced. The large lenders were more inclined to sell their loans like this therefore you see this with the big banks, where the judicial process is required because they can't foreclose as they normally would on a trust deed. This is an Oregon law so we are having a lot of judicial foreclosures. A PITA.
Judicial and trustee sales are both used to foreclose mortgages (trust deeds) that are in default. Only a trust deed can be used in a trustees sale but the judicial is required with trust deeds where mentioned above where the law requires and title can't be traced.
This is different (my understanding) in Washington where the chain of title law doesn't apply.
Thanks for the information.
In summary, I think it would be best to continue this convo your WA counterparts/investors with your experience. Ill message you offline about networking.
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