This law requires the notice of trustee’s sale (NOTS) to include a disclosure to potential bidders of the risk of loss involved in bidding, and advice to the property owner about the sources of information on scheduled and postponed sales.

California Civil Code 2924f

Added by S.B. No. 4
Effective April 1, 2012

Beginning on April 1, 2012, a recorded and posted Notice of Trustee’s Sale (NOTS) will inform bidders of the risks associated with the foreclosure sale of a one-to-four unit single family residence (SFR). The disclosure to bidders is to contain the following wording:

[BEGIN]  NOTICE TO POTENTIAL BIDDERS: If you are considering bidding on this property lien, you should understand that there are risks involved in bidding at a trustee auction. You will be bidding on a lien, not on the property itself.

Placing the highest bid at a trustee auction does not automatically entitle you to free and clear ownership of the property. You should also be aware that the lien being auctioned off may be a junior lien. If you are the highest bidder at the auction, you are or may be responsible for paying off all liens senior to the lien being auctioned off, before you can receive clear title to the property.

You are encouraged to investigate the existence, priority, and size of the outstanding liens that may exist on this property by contacting the county recorder’s office or a title insurance company, either of which may charge you a fee for this information. If you consult either of these resources, you should be aware that the same lender may hold more than one mortgage or deed of trust on the property.  [END]

Also beginning on April 1, 2012, a recorded and posted Notice of Trustee’s Sale (NOTS) will inform property owners of information regarding postponement of sale. The disclosure to property owners is to contain the following wording:

NOTICE TO PROPERTY OWNER:

The sale date shown on this notice of sale may be postponed one or more times by the mortgagee, beneficiary, trustee, or a court, pursuant to Section 2924g of the California Civil Code. The law requires that information about trustee sale postponements be made available to you and to the public, as a courtesy to those not present at the sale. If you wish to learn whether your sale date has been postponed, and, if applicable, the rescheduled time and date for the sale of this property, you may call [telephone number for information regarding the trustee’s sale] or visit this Internet Web site [Internet Web site address for information regarding the sale of this property], using the file number assigned to this case [case file number]. Information about postponements that are very short in duration or that occur close in time to the scheduled sale may not immediately be reflected in the telephone information or on the Internet Web site. The best way to verify postponement information is to attend the scheduled sale. [END]

Any lender, beneficiary, trustee or authorized agent will provide current information regarding sales and postponements. The information is to be provided free of charge by internet, phone recording accessible 24 hours a day, seven days a week or other menus that provide access.

Failure to comply with these rules does not alone invalidate a trustee’s sale.

Editor’s note- See January 2012 first tuesday Form of the Month.