Legal Question in Real Estate Law in California

Escrow Payout of Note

I gave a $50,000 ''hard money'' loan and had the note recorded against a real property a few years ago. At about the same time the person to who I gave the money refinanced the same house I had the note on but did not disclose it to the bank. This person has since had the house foreclosed on and the bank has sold this property and is now in escrow with a buyer. I received a demand and reconveyance letter from escrow since my note recorded 4 days before the bank's note recorded, thus putting me in first position.

However, I was just told from escrow that the when the refinancing was done the bank took out title insurance in order to be in first position and new nothing about my note. Escrow now tells me that they are no longer obligated to pay me out, it is between the bank and me and the bank does not have to pay me.

Do I have any legal recourse to be paid out, since I truly am the first lien holder on this property with a recorded note? Please help!


Asked on 6/15/09, 4:47 am

1 Answer from Attorneys
Chris Johnson Christopher B. Johnson, Attorney at Law

Re: Escrow Payout of Note

Something doesn't sound right about the bank's position--make your escrow demand anyway, before it closes, and have an attorney review your note, the bank's note and the recorded documents.

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Answered on 6/15/09, 1:06 pm


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