Legal Question in Real Estate Law in California

Re: CA Trust Deed

Yes, I think so at least, but let me explain.

First, technically, the beneficiary doesn't sell the collateral; the trustee (or its agent) conducts the sale at the beneficiary's request.

Civil Code section 2941 provides a somewhat complex procedure (or more accurately, set of procedures) for reconveyance and return of cancelled original instruments when the obligation of a mortgage or deed of trust has been satisfied. I have looked at both the text of the law and a bunch of citations to it, treatises, etc., and not one of them states expressly whether a borrower who has NOT satisfied the obligation of his note is entitled to the return of his note when the collateral is sold and there is no further recourse possible to the borrower due to the antideficiency laws. In such cases, there has not been a satisfaction of the obligation as meant by 2941 (at least in my opinion), so the decument-return provisions of 2941 are not triggered by the trustee sale.

There does not seem to be any mention of original documents in the statutes (such as 2924 through 2924k) governing foreclosures under a power of sale (trustee sales). The selling trustee is not even required to show that it is in possession of any original documents, nor is the beneficiary required to flash any original loan papers in order to order a sale (at least insofar as I can tell with a couple hours research).

If someone else out there in LawGuru Land has different information, I'd like to know, as well as the person who asked this interesting question.