In a deed of trust, there are three parties — the lender, the borrower, and the neutral third-party trustee. Lenders rely on third-party trustees to handle crucial aspects of the deed of trust; these tasks can vary widely depending on the type of servicer acting as the trustee.
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If a lender finds that they need a trustee to change tasks significantly, it may be necessary to file a temporary substitution of a trustee. This is especially true in the case of foreclosure when a lender requires a foreclosure service to be the trustee.
What is a Substitution of a Trustee in a Nonjudicial Foreclosure?
In a deed of trust, the neutral third-party may often be a loan servicing company. The loan servicing company ensures the borrower makes payments, and the trustee holds the deed of trust until the borrower has paid the loan in full. After the loan is paid, the lender informs the loan servicing company, which delivers the deed of trust to the borrower, along with a deed of reconveyance.
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If the borrower defaults, it is the third-party trustee that forecloses the property on behalf of the lender. Oftentimes, the trustee is not an expert on the foreclosure process. The lender will have to therefore substitute the trustee with one that can foreclose the property in compliance with state and federal law. To substitute a trustee, lenders must file a Washington Substitution of Trustee form.
Why Should Lenders Substitute a Trustee in a Foreclosure?
Nonjudicial foreclosures on commercial real estate properties are complex. Failure to comply with state and federal law can result in serious consequences for the lender. Borrowers have the right to sue the lender upon evidence of noncompliance, which can result in stalling the foreclosure. Stalls can have major ramifications for small and medium- sized lenders. Therefore, it is paramount that lenders have trusted foreclosure specialists acting as their third-party trustee in the case of a foreclosure. Total Lender Solutions can protect assets and maximize recoveries by substituting for a lender’s original trustee, ensuring that lenders have an expert in their corner.
The foreclosure experts at Total Lender Solutions advocate for lenders looking to maximize recoveries on defaulted loans. Our team is composed of highly experienced real estate professionals and legal experts. For the past 15 years, we have transformed complicated processes into clear resolutions. We work through every stage of the foreclosure process, ensuring that lenders receive premium protection of their assets. To make Total Lender Solutions an extension of your team, contact us today.
Source: https://t-tees.com
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