CLTA Trustee's Sale Guarantee Guideline 22
Explanation:A Trustee under a Deed of Trust conducting a nonjudicial foreclosure acts in a private capacity and not as an agent of the state. Nevertheless, there are state statutes that regulate the sale proceedings. In particular, the statutes provide for notice to various parties who will be affected by the foreclosure. Failure to follow the statutes may invalidate a foreclosure and impose liability on the Trustee. Therefore, the primary purpose of a Trustee's Sale Guarantee is to provide the Trustee with information that will enable the Trustee to give notice of the foreclosure to the necessary parties.
The Trustee's Sale Guarantee supplies the Trustee with the names and addressed of these parties. In addition, California state law requires that a notice of the sale be published in a newspaper of general circulation printed and published in the city or judicial district where the land to be sold is located. The Guarantee describes the appropriate city or judicial district and may designate a qualified newspaper.
The Guarantee may serve an additional purpose. A foreclosing beneficiary may wish to use the title information contained in the Guarantee to aid in making financial decisions concerning the foreclosure. The form entitled Trustee's Sale Guarantee Plus is best suited for this purpose. The form entitled Limited Trustee's Sale Guarantee is available when less information is desired. This form does not purport to show all matters of record affecting title. Instead, only certain matters first appearing in the public records subsequent to the foreclosing deed of trust are disclosed.
Since a Trustee's Sale Guarantee is designed primarily for the benefit of the foreclosing Trustee, the Trustee will always be named as an assured. It is also possible to name the foreclosing beneficiary as an Assured.
The Guarantee is not intended to be relied on by prospective bidders at a proposed sale and it is not a general practice to disclose information contained in the Guarantee to such persons.
There is a duty of defense in the Plus and no duty of defense in the Regular Guarantee.
Underwriting Requirements:In California the Trustee must give notice to:
(a) the present record owner of the land subject to foreclosure;
(b) those parties who have requested notice of the commencement of the foreclosure proceedings;
(c) certain junior lienholders;
(d) certain state taxing agencies.
The underwriting guidelines contained herein have been provided for general reference. The facts, circumstances, and location of the subject property should be considered when determining the issuance of the requested form or endorsement. Please note that all of the forms and endorsements included in this system may not be available in all states. Accordingly, please contact the appropriate Stewart Title Guaranty Company underwriting personnel in order to determine availability.
Compliance with the underwriting guidelines contained herein in no way obligates Stewart Title Guaranty Company to issue any form or endorsement.
This guideline applies to the following form(s):