Re: Can Lender Petition to evoke Grant Deed?

Based on the facts that you were able to give, the attorney you spoke to was quite confused. If your boyfriend owned the house and borrowed money, the loan was secured by a deed of trust. A person who borrows money in the State of California and who later purchases this property can encumber this property. Even if they do not have title at the time they encumber the property, the encumbrance will attach. “Title acquired by the mortgagor subsequent to the execution of the mortgage, inures to the mortgagee as security for the debt in like manner as if acquired before the execution.” (Civ. Code § 2930). This provision has been made applicable to deeds of trust by case law. Barberi v. Rothchild (1936) 7 Cal. 2d 537, 540. This legal principle is known as estoppel by deed.

When he conveyed the property to you, you took the property either subject to or a conveyance coupled with an assumption. Assuming that you took it subject to, the beneficiary could foreclose on the property if your boyfriend stopped paying the mortgage. I have a lot of questions for you that I cannot set forth here. If you want to, feel free to contact me via e-mail in depth. All of my initial consultations are free, and it would appear to me that you are not in too much trouble at all.

Very truly yours,

Re: Can Lender Petition to evoke Grant Deed?

Be aware that since oral partnerships are legal partnerships in California the property might be considered as an asset of the partnership. Also, the property could be considered to be in a constructive trust with you as trustee for the share that belongs to your "partner" if there is no partnership. Lastly, if your partnership was to live together in a similar situation as a married couple California domestic relations law may apply to your partnership.

Your matter is fact intensive. You should consult a competent attorney that has experience in Real Estate, Partnership and Domestic Relations law in California.

Re: Can Lender Petition to evoke Grant Deed?

A lender can file suit to question the validity of a deed, if the validity of the deed affects the lender's interest. Most lenders are mainly interested in having collateral and getting paid, so I'd say lender suits to establish the validity or invalidity of deeds are rather uncommon, so long as the monthly payments are on time.

Also, as has been pointed out, creating a partnership doesn't require a written agreement or any other formality. California's partnership law says a partnership is formed whenever two or more persons associate to carry on a business with the intention of sharing profits.

Your question doesn't provide a lot of information about the selection, financing, purchase, and deeding back-and-forth of the house (or is it more than one house) involved here. It almost sounds as though HE bought and financed the house, THEN later on transferred it to you........but at the same time, it seems as thought YOU had to put up some money.

No lawyer will be able to advise you properly without knowing the complete sequence of events, first to last, and the complete flow of money....

down-payment money, borrowed money, your money, his money, money used for payments since purchase, and so on.

It is also rather important to know how title is or was held at each step, starting before the house came into either of your hands, right down to today. Are you tenants in common? If so, 50-50 or otherwise? Joint tenants? Or are you the sole owner?

Who is liable on the loan? This is a separate matter from ownership, of course. Liability on the loan is not such a big deal except to the extent you are an owner, because in the event of a default, the lender will take the collateral and (usually at least) cannot come after the borrower(s) for a deficiency.

As to the legal advice you've received thus far, up to the point where the attorney discovered that he had a conflict of interest and clammed up, it may or may not be sound advice. The big problem is that you've been left neither understanding the advice you were given, nor able to ask follow-on questions.

I would be happy to provide a more detailed opinion on your rights and legal risks if you provide me the details mentioned above. No charge. If a legal case is involved, I could assist you without travel costs since I travel to and through Butte County frequently on business and personal matters.