Legal Question in Real Estate Law in California
trustor sold for cash - investor won't pay off note
I am bene of note and d/t in 2nd position. The trustor/borrower sold his interest in property to 3rd party investor without title insurance. investor paid trustor cash and recorded grant deed. now investor owns property with other individuals on title to property. can I foreclose when trustor no longer owns property?? how?
2 Answers from Attorneys
Re: trustor sold for cash - investor won't pay off note
Yes, you can still foreclose. Please refer to my previous responses to your question.
Re: trustor sold for cash - investor won't pay off note
Also refer to my previous answer. The fact that there is an "investor" on title now, plus other people, gives me a whiff of the odor of scam....how many of these people are aware of your lien? If it is recorded, you are protected, but what is this investor up to? The investor may be suckering unsophisticated co-investors into this deal with full knowledge of your lien, but without disclosing it to his "clients," who will be left holding the bag after you foreclose.
Two more interesting questions here -
(1) Was your loan purchase money? If so, while you can foreclose upon the trustor's default, you are not entitled to a deficiency judgment if the first is foreclosed and you lose your collateral through the foreclosure sale.
(2) What happened to the 1st when the property was sold, and is the original borrower or the investor current or in default?
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