What is a substitution trustee?

What is a substitution trustee?

A Substitution of Trustee is a form filed when a successor trustee takes the place of a previous trustee. A successor is a person or entity who takes over and continues the role or position of another. For example, many grantors and their respective spouses act as the initial trustees of a revocable living trust.

Who is the trustee in a foreclosure case?

Depending on state law, the trustee might be an individual, like an attorney, or a business entity, like a bank, title company, or a trustee company. The trustee gets legal title to the secured property when the loan is taken out and holds it until the borrower pays the debt in full.

Who is the neutral party in a foreclosure?

In theory, a foreclosure trustee is a neutral party, but the lender or loan servicer usually chooses the trustee, who is often affiliated with the lender or the lender’s attorney. Few states have laws addressing the neutrality of foreclosure trustees.

Can a deed of trust be used as a foreclosure trustee?

Again, in states where lenders use deeds of trust or a similar instrument containing a power of sale clause, a lender may foreclose out of court in a process called a nonjudicial foreclosure. At trustee typically manages the nonjudicial foreclosure process.

How does a security interest work in a foreclosure?

(When you give a lender a security interest in your property, this means the property acts as collateral for the debt.) Lenders in some states, like Ohio and New York, use mortgages to create a security interests in properties. In other states, like California and Oregon, lenders use deeds of trust or a similar-sounding document.

When does a trustee come into play in a foreclosure?

The trustee comes into play if you fall behind in loan payments and go into foreclosure. Again, in states where lenders use deeds of trust (or a similar instrument containing a power of sale clause ), a lender may foreclose out of court in a process called a nonjudicial foreclosure.

In theory, a foreclosure trustee is a neutral party, but the lender or loan servicer usually chooses the trustee, who is often affiliated with the lender or the lender’s attorney. Few states have laws addressing the neutrality of foreclosure trustees.

Again, in states where lenders use deeds of trust or a similar instrument containing a power of sale clause, a lender may foreclose out of court in a process called a nonjudicial foreclosure. At trustee typically manages the nonjudicial foreclosure process.

Can a trustee be involved in a nonjudicial foreclosure?

In some states, nonjudicial foreclosures are handled by a foreclosure trustee. In some states, homeowners facing foreclosure might find that a trustee is involved in the process.