What You Do To Stay In Possession Of Your Home After The Property Is Sold At A Trustee's Sale
Defend Against The Unlawful Detainer And Not Take A DefaultThe unlawful detainer is an expedited legal procedure to gain possession. You have only 5 days to respond to the UD summons and complaint. File an answer if there are no defects in the complaint worth challenging. There is right to conduct discovery and right to jury trial. You should serve written discovery on the lender and request jury trial. Doing this may cause enough concerns on the lender that may give you some leverage for possible settlement negotiation, even possibly loan modification after you've lost title -- it has happened before. To preserve your right to jury trial, you have to file a request for trial setting and demand for jury trial and post jury fees at least 5 days before trial after it has been set. Lender has to respond to your written discovery within 5 days. You might want to ask the lender to produce documents related to the loan itself and the foreclosure.
File A Separate Quiet Title ActionIn UD, you may litigate title issues relating to Civil Code 2924 on procedural matters relating to notices of default and trustee's sale and services of notices but not fraud issues.
You can't have a full-blown litigation on title issues in UD cases. So you have to file a separate action for quiet title which essential means to get your title back.
In your quiet title action, you may litigate fraud and estoppel issues. During the loan modification process, if the lender made certain oral representations which induced reliance your reliance, you may be able to make them accountable and get your title back. Bear in mind the court may ask you to prove you have money to pay what you owe the lender as a condition to giving you your title back.
However, the quiet title action may be moot unless you're able to prevent further disposition of the property.
Record a Lis PendensThe law allows you to record a lis pendens against the property if you have a quiet title action. A lis pendens (or notice of pendency of action) is a document you would record at the county recorder's office to let the whole world know of the quiet title action that you've filed. It's purpose is to impose what we legally call constructive notice such that you maintain your right to quiet title against subsequent purchaser. No title company would allow the escrow to close if they see there is lis pendens recorded against he property. But be prepared to defend against a motion to expunge (remove) the lis pendens which the lender may do if they've found a buyer.
Consolidate The UD Action With The Quiet Title ActionAs a matter of strategy, it is highly important that you seek consolidation of the UD and quiet title action to allow you to litigate all title issues in the UD claim. Also, if granted, the motion essentially gives you more time to negotiate your issues with the lender.
You have to be diligent and act fast. Ideally, your quiet title action should be filed before the lender files the UD case. But if you're not able to do that, it's still possible to do it after you learn about the UD case. Just more difficult for attorney.