Issuing the Trustee Sale Guarantee document marks the start of foreclosure. In this case, it helps the lender and/or their private investors by providing information needed to ensure they follow federal and state regulation. The lender or private investor (the trustees) hire a title company to issue the TSG, which gives notice of the pending foreclosure.
The Trustee Sale Guarantee supplies the following public record information. It may also list more information depending on the state:
- To whom the property’s title is vested as noted by the Mortgage or Deed of Trust. (Who has ownership of the property.)
- The encumbrances against the land. Encumbrances include liens, deed restrictions, easements, etc. Above all, encumbrances are anything that may restrict the owner’s ability to transfer title to the property.
- The names and addresses of individuals and entities who must, under state law, receive notice of the foreclosure proceedings.
- The newspaper qualified to issue public notice of the foreclosure proceedings.
- The city or judicial district in which the land is located.
As a result, many think that a Trustee Sale Guarantee ensures that the lender conducted the foreclosure properly. A Trustee Sale Guarantee does not ensure this. In fact, the document only does two things:
- Ensures that all relevant parties receive notice of the pending foreclosure.
- Lists information all parties need to complete the foreclosure.
You’ll notice that neither of these items guarantee that the lender completed all steps correctly. For this reason lenders and borrowers should research and understand applicable federal and state law.