Legal Question in Real Estate Law in California

I want to buy this house at a trustee sale but afraid of not getting the title. Hope some law gurus here would shed some lights on my question. I have put my question as simple as I can as follows: Owner A owned a house in California and quitclaimed his house to Owner B a year ago. Owner A is still on the mortgage but no longer on the title of the house that was quitclaimed to Owner B. Owner B is on the title of the house but not on the mortgage. Mortgage is a senior/1st priority lien and the mortgage is now in default. Now the house is scheduled to be sold at a foreclosure trustee sale. If I buy the house from the trustee sale, who will get title to the house? Me, Owner B, or both Me & Owner B? Why? Thanks.


Asked on 9/07/18, 12:20 pm

1 Answer from Attorneys

Unless there are other title complications not mentioned in your question, you would get clear title to the house. A deed of trust acts sort of like a place-holder. The technical term is a conditional grant of title. If the loan secured by the deed of trust is paid off, the deed of trust is reconveyed and goes away as if it never affected title. However, if the lender has to foreclose on the loan and conducts a trustee's sale, then it is as if the deed of trust was a full grant deed back when it was recorded. All liens (except tax liens), deeds, later deeds of trust, etc., all are invalidated as if they had happened after A sold the property to you. The state of title reverts back to the recording of the deed of trust as if the property had been sold to you at that time. This assumes, of course, that there are no grounds to challenge the loan, deed of trust, or trustee's sale for any irregularities in that process.

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Answered on 9/07/18, 3:10 pm


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