Legal Question in Real Estate Law in California

It is quite common for a new trustee to be substituted in, when a foreclosure commences.

It seems you are trying to ask whether a foreclosure trustee company, ReconTrust, can conduct the default and foreclosure process on a deed of trust when another trustee is listed on the original deed of trust given at the time the loan was made. The answer is "yes," if there has been a substitution of trustee made. Lender, as beneficiary of the deed of trust, can substitute the trustee at any time. In fact, it is actually very unusual for the trustee that forecloses in the case of a defaulted loan, or that reconveys the deed of trust when a loan is paid off for that matter, to be the same trustee listed on the original deed of trust. Because it is common practice for the title companies handling the loan escrow to simply list themselves as trustee, although they are not in the business of reconveyances or foreclosures, there is almost invariably a substitution of trustee before any action on the deed of trust. ReconTrust being in the business of foreclosures, they almost certainly obtained a substitution of trustee from the beneficiary of the deed of trust (the lender) as part of the paperwork package to open a file for the foreclosure.

A California residential loan arrangement is informally called a "mortgage" but it really isn't; it is a promissory note secured by a "deed of trust." There are three parties to such an arrangement: the lender, also sometimes called the beneficiary, or the secured party; the borrower/homeowner; and the trustee. When a borrower falls into default and a foreclosure approaches, the law requires the issuance of a Notice of Default by the lender to the borrower, The trustee is seldom, if ever, involved in issuing a Notice of Default. The same is true of the Notice of Trustee Sale. These are notices given by the lender, not the trustee. Indeed, the trustee which will actually conduct the foreclosure auction may not even be appointed by the lender until just before the Notice of Trustee Sale.

So, in your case, I'd suppose Recontrust is the lender, doing what lenders do.

Please note that Recontrust or whoever is your current lender often is not the same party from whom you borrowed in the first place. Loans are typically re-sold, giving you a new lender that you've never done business with and maybe never heard of.

Mr. Whipple is a very knowledgable real estate attorney, so I am surprised he is so off base regarding the foreclosure industry. ReconTrust is one of the largest "default management" service companies in a very sizable industry of professional foreclosure trustees. They are neither lenders nor loan servicers. They and businesses like them are in the business of being substituted as trustees under deeds of trust and then conducting the foreclosure process for the lender and/or loan serviced. They step in at whatever stage the lender or loan services chooses, but they a definitely pitch their services as being available right from the recording of the notice of default to the recording of the trustee's deed after the sale.

They can if they have they have been substituted as a trustee, or are an agent of the trustee or a substituted trustee. I suggest having the paperwork looked at by an attorney, to see if there is a problem..