Legal Question in Real Estate Law in California

Re: foreclosure and right to refund

It may be worth looking into. It seems that you had enough equity in the house to be able to do a short sale and still make out. Contact me directly.

Re: foreclosure and right to refund

Well, in a sense the bank paid what it was owed at the foreclosure sale, because it gave up its claim to the balance due in exchange for the collateral. If there were no other bids, that kinda establishes the value of the house at the time of the foreclosure as the loan balance, or less. It's hard to imagine why no one bid more than $76,000, unless perhaps you mean you owed $76,000 on the loan that was foreclosed, but in addition there were other obligations such as a senior loan or a tax lien.

Maybe the bank got a bargain, maybe not. Anyway, unless the foreclosure sale was at a higher price than the sum of the liens and the costs of the sale, there is nothing to distribute to the borrower/owner.

The fact that the bank then resold the house for a higher sum does not mean you are entitled to the excess. Once the bank is the owner, it can resell or whatever for its own account, and that's what they usually do, as soon as possible, and more often than not at a small loss.

So, that's the legal background. In your case, the difference between what you say you owed ($76,000) and the subsequent resale ($275,000) is so large, I suspect either (a) there was another lien or two in addition to the $76,000, as discussed above; or (b) for some reason, the trustee's sale was not properly noticed or advertised. It seems very suspicious for a bank to pick up a property for $76,000 when it is really worth $275,000. I think explanation (a) is probably more likely than explanation (b), but if you are sure there were no liens in addition to the $76,000, I recommend you investigate and complain to the bank or its foreclosing trustee, and if that doesn't work, retain a real estate lawyer promptly.