Legal Question in Real Estate Law in California
I purchased a property in California with two other people. Only two of us are on the mortgage. On the day of close, the escrow officer said that regulations prevent her from listing the non-borrowing party on the grant deed because the lender had failed to list him on the deed of trust as a "non-borrowing title holder." What regulation stipulates this, and is the escrow officer's interpretation correct?
1 Answer from Attorneys
It is probable the bank loan documents require this. To get a title policy providing the lender security of the entire property, all co owners must sign the deed of trust to perfect the security interest. The third co-owner will need to be on title, or the lender will need to be willing to loan on only 2/3 or the property as security. Either way your loan and/or title documents need to be corrected.
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