There are two kinds of sales that can be attacked by the debtor: void sales and voidable sales.
A void sale creates no presumptions in favor of the purchaser at a trustee’s sale. And recitals in a trustee’s deed regarding notices are irrelevant when the sale is void. See, Bank of America v La Jolla Group II (2005) 129 CA4th 706, 28 CR3d 825 which found that in a void sale:
“The sale was improper because … the beneficiary had no right to exercise the power of sale. No statute creates a presumption-conclusive or otherwise-for any purchaser-bona fide or otherwise—that any recitals in a trustee’s deed render effective a sale that had no contractual basis."
A voidable sale, however, requires evidence of irregularities in the sale process, and it is nearly impossible to set aside the sale as to a bona fide purchaser.
In a voidable sale, once a trustee’s deed reciting that all legal notice requirements have been satisfied has been transferred to a buyer at a foreclosure sale, the sale can be successfully attacked on the grounds of procedural irregularity only if the buyer is not a bona fide purchaser. See, Moeller v. Lien (1994) 25 Cal.App.4th 822, at p. 831; 4 Miller & Starr, Cal. Real Estate (3d ed. 2000) §10:211, at p. 648.
As to a buyer who is not a bona fide purchaser, such as the beneficiary buying at sale by way of a credit bid, there is only a rebuttable presumption regarding the recitals in the trustee’s deed regarding notice. This presumption can be overcome by a showing of irregularities in the required notices. See, Wolfe v Lipsy 163 Cal. App. 3d 633, at p 639, 209 Cal. Rptr. 801 (1985) concluding:
“…its effect is merely to provide prima facie proof of the particular facts that the sale was conducted regularly and fairly, until contradicded and overcome by other evidence [cites omitted]."
And, although Civil Code 2924 sets forth a presumption that the notices required prior to the conduct of the sale were properly provided if the trustee’s deed states that they were properly given, these presumptions only apply to the notice provisions, not to other defects in the foreclosure process. See, Bank of America v La Jolla Group II (2005) 129 CA4th 706, 28 CR3d 825 finding that the provisions in question establish presumptions only about the adequacy of notices related to a foreclosure sale:
“Miller and Starr assert that “[t]he statutory presumption [created by section 2924] only applies to the propriety of the required notices, [and] it does not apply to other requirements of the foreclosure process." (4 Miller & Starr, supra, § 10:211, p. 680.) For the reasons stated above, we agree."
If the defendant is not a bona fide purchaser, Plaintiff is thus entitled to attack not just the other requirements of the foreclosure process, but the propriety of the required notices as well.
Even if the defendant is a bona fide purchaser, Plaintiff may still be entitled to attack other requirements of the foreclosure process.
A void sale requires no tender as a prerequisite to setting aside the sale. See, Scott v Security Title Insurance & Guarantee Co. 9 Cal. 2d 606, 610-611 (1937).
A voidable sale does require that a tender be made as a prerequisite to voiding and setting aside the sale. This tender must consist of paying or offering to pay “at least all of the delinquencies and cost due for redemption…" 4 Miller & Starr, Cal. Real Estate (3rd ed. 2000) §10:212, p. 686.
According to 4 Miller & Starr Cal Real Estate (2d ed. 2000) $10:212 at p. 689 the financial ability to perform the tender can be shown by evidence that:
“…the person making the tender has convertible asset and the ability to perform, or the property has considerably greater value than the debt being foreclosed, or an offer has been made to sell the property to pay the debt, or possibly that an offer has been made to refinance, if feasible."
Thus, the California Supreme Court found sufficient tender existed where the debtor had convertible assets and the mere ability to borrow. See Backus v Sessions 17 Cal 2d 380, 110 P. 2d 51 (1941).
And the fact that a debtor did not have cash immediately available is not fatal under California law. See, In re Worcester 811 F.2d 1124 (1987) finding:
“Worcester’s request for the sale of her land for the benefit of the creditors and her offer to redeem provide the certainty of sufficient proceeds to satisfy the tender…"
Finally, a tender may not be required when it would be inequitable to do so. See, 4 Miller & Starr, Cal. Real Estate (3d ed. 2000) Sec.10:212, at p. 686. Humboldt Sav. Bank v McCleverty 161 Cal 285, 291 119 P. 82 (1911).