in a trust deed foreclosrue sale, does the trustee get to keep the equity already in the property after paying off the defaulted loan? in other words, does the trustee just try to get the unpaid loan amount for the property or try to profit? Or turn the profit over to the lender?
for example: Scott Spivey takes out a loan on a trust deeded property, with a market value of 100k and scott took out a loan for 100k. He defaults after paying 20 k of it off. So the trustee exercises his sale right and sells it for 100k. He pays off the lender the 80k. What the happens to the 20k left over?
Goes back to the borrower. The trustee conducts the auction. The trustee isn't the one exercising any rights. The lender is. The trustee is just working on behalf of the lender.
So in the event of a foreclosure the lender gets the title to the property?
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@Jon Holdman I am looking at the upcoming tax deed sale in King County, WA as my first real estate purchase. The property has a deed of trust with Bank of America of $100k. The minimum bid price is around $40k. Does this mean that BofA has waved their right to the property? I am grateful for any tips. I am analyzing all properties at the up coming auctions in WA state and will begin attending in person auctions every Friday morning to learn the process and practice finding deals.
@William MacBride The excess goes to the borrower, but exactly how that happens probably varies from state to state.
In Massachusetts, the borrower needs a lawyer to file an interpleader in court to claim the overpayment.
Tax Deed sale is completely different then Trustee Sales every Friday. BofA would potentially entitled to the overage from the Tax Deed Sale by the County if the Sale/Auction yields more then the property tax delinquency amount and based on lien position or lien order from that sale/auction.
Trustee Sales are a lender slightly different animal, however property taxes are basically always in first position and always going to be paid one way or the other.
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