The balloon payment originally was due in 2009, and the bank extended the loan twice with maturity 05/13. Bank would not reinstate and tried to work w/ borrower as he attempted to re-fi, but he has had no success due to a cloud on his title – incomplete lot line adjustment on his and an adjacent property because borrower encroached that property when he remodeled his home. Bank filed NOD 09/13, but has not conducted Trustee’s sale. Borrower has made payments on the loan to a “parent bank” since 07/13, even though loan had matured. The foreclosing bank/assignee had no knowledge of alleged payments to “parent bank” and is investigating. Can bank proceed with the Trustee’s sale?

Answers provided by Chilina Law Firm:

You pose an extremely complicated circumstance which cannot be fully answered by an online post. I highly suggest that the borrower contact an attorney that focuses on foreclosure and debtor-creditor law in California. With that said, the bank’s continued acceptance of payments subsequent to the filed NOD may have constituted a waiver of the default in which allowed the bank to file the NOD thus allowing avoidance of any proposed trustee’s sale. If this is the case, the bank would have to terminate the current NOD and restart the default/foreclosure process. DO NOT handle this legal matter on your own. Hire an attorney immediately.


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