Legal Question in Real Estate Law in California

There are a lot of layers to your question. The sale may not be valid, but if the investment company did not know that your parents did not recieve notice of the sale, it probably is valid and cannot be undone. Without knowing more details it is hard to say. It is also hard to say what it is your parents got from the court and what its relevance is to any lawsuit against them. It is probably an eviction action, but without knowing more I cannot say for sure, since an eviction compliant should have had a court's filed stamp on it and been accompanied by a summons with the court's seal on it. As for the proceeds, the trustee has 30 days to send out a notice of any surplus proceeds and instructions for claiming it. If it has been more than 30 days since the sale, and your parents do not want to contest the sale, you need to contact the trustee and demand compliance with Civil Code section 2924j regarding the excess proceeds.

I agree with the previous answer. I feel compelled to add that your parents (a) apparently do not deny that they were well behind on making their mortgage payments at the time of the sale, and (b) seem to have disregarded the Notice of Default. Foreclosure is an almost inevitable consequence of getting months behind on paying the mortgage and not taking action upon being placed in default on a loan secured by a deed of trust.

The moving parties in a foreclosure are, much more often than not, a "holder in due course" which has acquired the note and the security instrument in a succession of one or more resales after packaging up by the loan originator (the bank or other institution your parents might regard as their lender), and a trustee, which is a cold-and-prickly foreclosure specialist substituted in at the last minute for the warm and fuzzy escrow company named as trustee at the time the loan was made, decades ago. This does not make the foreclosure fraudulent or irregular; these are just the outfits called in to do the dirty work when need be.

Possibly your parents made a strategic error in allowing a home with $200K+ of equity go to foreclosure for want of (?) $7K of payments....... if the foreclosure sale produced only $80K in excess proceeds, this may reflect a poorly-planned or even fraudulent sale, or maybe it just reflects that foreclosure sales are too numerous and too frequent to command the same prices that careful marketing through a broker would produce. In any event, it was unfortunate that a house with so much equity was allowed to slip into foreclosure for such a small arrearage. Possibly you could have protected your inheritance by helping the folks out with a second, so they could get current?

In addition to other sources including the public record at the County Recorder's office, your parents could contact the selling trustee directly for a copy of its accounting for the proceeds of sale. (Maybe your folks aren't reading, or aren't understanding, official-looking stuff they get in the mail......most foreclosure trustees are sending notices by both certified and regular mail, because they know people think that by refusing their certified mail, they are legally not being notified. This is not true; the addressee of certified mail who refuses it or fails to pick it up at the post office is often legally presumed to know the contents, just as fully as if they had signed for, opened and read the mail.)

Has this matter been resolved? If not then, I would like to review this case for litigation purposes. I disagree with the conclusions above that it was your parents' fault. Contact me directly at 619 222-3504 or e-mail me at [email protected].