Legal Question in Real Estate Law in California

Re: How to find what was paid in foreclosure?

The answer to your question depends, to some extent at least, upon whether the foreclosure was by judicial action or a trustee's sale, and whether the junior loan was purchase money.

If it were a judicial foreclosure, you'd find the information you need in the court's file, so I'll assume a trustee's sale. The trustee must distribute the proceeds of sale in this sequence:

First, the trustee's own costs, expenses of sale and of handling the proceeds;

Next, to satisfy the debt owed to the trust deed beneficiary;

Next, to pay junior lienholders in their order of priority; then

Finally, to pay any surplus to the trustor or its successor.

The trustee must notify the junior lienholders of amounts available for possible distribution.

If the junior liens cannot be paid in part or in full from the sale proceeds, the junior secured creditors cannot sue the borrower for the deficiency unless the note was a recourse, non-purchase-money obligation or some other very unusual circumstance permits the junior lender to sue for the deficiency.

So, where do you find records of all this? One obvious path is to ask the trustee who conducted the sale. Also, under many circumstances, the trustee is required to make reports of claims, send various notices to the junior creditors, etc., which may result in a "paper trail" in the hands of others besides the trustee and the lender/beneficiary. You may want to review Civil Code sections 2924j and 2924k.

Finally, the purchaser at a foreclosure sale takes free and clear of the claims of lenders and the prior owner.