Legal Question in Real Estate Law in California

Re: Mortgage Foreclosure Auction

There is no law that I am aware of preventing you from sending an agent to bid on the property at the sale. However, you must pay by cashier's check if you are the successful bidder. Therefore, your agent must be extemely trustworthy and have the ability to coordinate with you on having enough funds available to pay if you are the successful bidder. It would be very tragic if the agent you selected put his or her name on title as the purchaser rather than your name.

Re: Mortgage Foreclosure Auction

You can have your attorney in fact appear and bid on your behalf via a power of attorney. You can contact me for this, I'd be glad to work with you.

Re: Mortgage Foreclosure Auction

I assume this would be a trustee's sale rather than a judicial foreclosure. Trustee sales under a foreclosed deed of trust are the more common variety in California.

There are a couple of relevant statutes you might want to look at; you can probably find them on line: Civil Code section 2924h regulates bidding. You might also look at 2924g and for that matter other "2924" series laws.

Anyone can bid, even the trustee (but trustee bids are always suspect).

The trustee has the power to decide what is an acceptable form of payment -- it must be cash or cash equivalent -- but what is an acceptable equivalent is within the trustee's discretion. Use of a cashier's check or checks makes placement of bids in a competitive environment very difficult, if not impossible, so I believe at least that many experienced bidders use letters of credit or other forms of bank guarantees to back up ordinary checks. This should be discussed with the trustee prior to the sale.

You can use an agent, and I'm not even sure that a power of attorney would be necessary; I know of no reason that an ordinary appointment wouldn't suffice--but the agent should disclose the identity of his principal to avoid personal liability. This also should be discussed with the trustee well before the auction.

If your agent were foolish enough to use your money, but put himself on title through having the trustee deed it to him, with adequate proof you could easily (but at a cost of time and money)have a court rectify the situation on any of several legal grounds including fraud and resulting trust.