By: Julia M. Wei and Josue Uribe Fonseca

Foreclosure filings were initially down nation wide for COVID-related reasons but as we head into fall, those moratoriums are all lifting. That means it’s time to talk about bid instructions to the trustee and why lenders should beware of the full credit bid.

Lenders Lose Rights When They Take a Property Back With a Full Credit Bid.

After the Notice of Default has been recorded, and the borrower fails to reinstate the loan, the foreclosing trustee will ask the beneficiary to provide bidding instructions for the trustee’s sale. The trustee will ask what the opening bid amount is.

California Judicial Council Adopts New Rules to Lower Jail Population, Suspend Evictions and Foreclosures

By Julia M. Wei, Esq.

On April 6, 2020 by teleconference, the Judicial Council issued 11 temporary rules effective immediately. The full text of the emergency rules here.

As our firm’s earlier update regarding eviction moratoriums noted, there has been movement both on the state and local government level to halt or otherwise slow the progression of evictions due to non-payment of rent for COVID-19 related reasons. The practical implications are that any unlawful detainer must be filed in the courts and now the California Rules of Court emergency rules are in effect as to ALL unlawful detainer actions (whether COVID-19 related or not). My reading of the new rules is that it applies to both commercial and residential eviction.

In a recent opinion, the California Court of Appeal found that after foreclosure, all of the borrower’s leases (and its waivers) were assigned to the lender, and therefore unavailable as a defense to the former owner against a creditor. Therefore, the judgment creditor was successfully able to add two new parties to the judgment as the limitation the lease no longer shielded them.

Yolanda’s Inc. owns and operates restaurants. Yolanda entered into a lease to operate a restaurant at the Seabridge shopping center in Oxnard, California. The landlord K&G and Rocklin and its real estate broker KGCRE failed to inform the tenant that they were in negotiations to lease another space in the shopping center to the gym. The gym’s customers used all the parking spaces, resulting in loss of business for Yolanda’s. Yolanda’s prevailed in its lawsuit against the landlord, alleging among other causes of action, fraud and breach of lease. Yolanda obtained a judgment in the amount of almost 2 million dollars, plus another nearly half a million dollars in attorneys’ fees and costs.