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Terri, Real Estate Pro in Sacramento County, CA

Has anyone out there heard of a lender having the buyer sign a form at closing stating they are waiving their

Asked by Terri, Sacramento County, CA Mon Jul 27, 2009

rights to the foreclosure process in the event they default. A friend of a friend called me over the weekend about this. She said her friend has been delingquent for 8 months trying to get a loan mod. Of course no contact until now the loan mod person calls him and says bank wants you out by August 15th 2009. It obiviously is now bank owned and he did not even know it as agents are knocking at the door wanting to show the property.

Has anyone heard of this? Does he have the same rights as tenants after foreclosure? Does the bank need to serve him eviction papers?

Bay Area, Ca

Help the community by answering this question:


Deed in lieu of foreclosure isn't always initiated by the defaulted borrower--even in TX. I know this, because I also invest in DFW. Relatively recently (several months ago), some lenders began to initiate the "deed in lieu" discussion with their defaulted borrowers hoping to save money and avoid the foreclosure itself.

I agree that there's definately more to the picture than that friend is letting on.
1 vote Thank Flag Link Tue Jul 28, 2009
Yes DP2, I figured it sounded like a deed in lieu, but he said they had him sign at docs when he purchased the home. Who knows. I to would think that he would have to be evicted through the eviction process.

Geanne, I also think this same thing, but the home is listed as they have come by with flyers and such. He said he was not offered anything at all. He said that the person trying to do the loan mod called him and said the bank wants him out by that time. It was proobably the bank trying to do the loan mod also. If the bank wants him out, I would think he still should have to be served some kind of paperwork.

I agree with you both. I still think something is weird. I told him about the " show the note"

I am throwing this out to everyone just looking for other opinions to see how others think, or I should say to see if what I am thinking is the same.

Thanks guys for the answers.
1 vote Thank Flag Link Mon Jul 27, 2009
Yes, I've heard of it, but I think it's a practice (aka deed in lieu of foreclosure) that's less common for conventional lenders than for private money lenders.

That friend of a friend probably should seek council from a knowledgeable real-estate attorney. S/he might try using the "show me the deed" strategy, and try to do a short-sale. To my knowledge, only a sherrif can remove the person from the property.
1 vote Thank Flag Link Mon Jul 27, 2009
Hi Terri,

I've never heard of that, I do a lot of short sales so it is possible that lenders would start to require something that protects their interest in the property. Also I think there is more to the story, he had to have received a notice of default and received a notice of trustees sale that was mailed and slapped on his front door. The bank is probably being kind in giving him until August 15th as they could do an eviction since he no longer owns the residence. Also, was the property listed? It sounds as if the bank hired an agent to list the property, the REO agent would have done an investigation as to the occupancy of the home prior to listing it and that would be when they offer cash for keys. Unfortunately he doesn't have any tenants rights as he is not a tenant.
1 vote Thank Flag Link Mon Jul 27, 2009
Sounds like many parts of the story are missing. He should talk to an attorney, with all the paperwork from the original loan to whatever was given to him by "loan mod" company. He may be able to talk to legal aid or a HUD counsler too.

Do you think this was one of the loan modification companies that you sign your house over to and then they try to short sale it?

It is hard to believe he never got any of the notifications.

Just when I think I've heard it all....
0 votes Thank Flag Link Tue Jul 28, 2009
No it wouldn't be a deed in lieu of foreclosure. The owner is the one that calls the bank and says, "hey I can't make the payments, so here's the deed in lieu of you foreclosing on me". Obviously it doesn't sound like this homeowner did this, since they are claiming they knew nothing of what was going on. Is the homeowner sure that it was the bank trying to do the loan mod, and not one of these scam outfits? I only ask because there are certain processes a bank must go through to foreclose (at least here in Texas). Terri, I don't know your laws in CA, so they could be different. I just can't imagine the homeowner not knowing something was coming. You call 3 times a week and bug people until something is resolved on your loan mod. You can't wait 8 months and then expect not to be evicted. I'm not sure you are getting the entire story if it was truly the bank trying to get the loan mod done. Either way, I'm sorry to hear of your friend's problem. It's getting to be more and more like this everywhere.

0 votes Thank Flag Link Mon Jul 27, 2009
Sorry, spelling error's. This buyer said he was told he signed this paper at closing 3 years ago
0 votes Thank Flag Link Mon Jul 27, 2009
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