Legal Question in Real Estate Law in California

You are confusing the debt with the security. The security would be invalid if the debt was invalid, but the debt isn't invalid just because the security is invalid. You don't get to rescind the debt just because something got screwed up in the deeds of trust to secure repayment. You owe the money. Just because something got screwed up and they can't foreclose on the house doesn't mean you get out of owing the money or you can make the bank take the house. In fact you could make the bank take the house if you DID give proper security, but not if you didn't and refuse to correct that. As for getting out of the house and the loan, if you don't correct the problems with the deed of trust, the bank will sue you for the debt. That is FAR worse on your record than a foreclosure. Your only other option if they will not do a short sale, is a deed in lieu of foreclosure. The bank may take that, especially since it saves them the trouble of making you correct the security. You just sign the house over to the bank by deed, instead of deed of trust and a foreclosure. But that doesn't look much better on your record than a foreclosure. The bottom line is that not repaying a real estate loan is going to ruin your record no matter what. Refusing to work with the bank to solve a problem with the paperwork will only make it worse.

You are confusing the debt with the security. The security would be invalid if the debt was invalid, but the debt isn't invalid just because the security is invalid. You don't get to rescind the debt just because something got screwed up in the deeds of trust to secure repayment. You owe the money. Just because something got screwed up and they can't foreclose on the house doesn't mean you get out of owing the money or you can make the bank take the house. In fact you could make the bank take the house if you DID give proper security, but not if you didn't and refuse to correct that. As for getting out of the house and the loan, if you don't correct the problems with the deed of trust, the bank will sue you for the debt. That is FAR worse on your record than a foreclosure. Your only other option if they will not do a short sale, is a deed in lieu of foreclosure. The bank may take that, especially since it saves them the trouble of making you correct the security. You just sign the house over to the bank by deed, instead of deed of trust and a foreclosure. But that doesn't look much better on your record than a foreclosure. The bottom line is that not repaying a real estate loan is going to ruin your record no matter what. Refusing to work with the bank to solve a problem with the paperwork will only make it worse.

You are confusing the debt with the security. The security would be invalid if the debt was invalid, but the debt isn't invalid just because the security is invalid. You don't get to rescind the debt just because something got screwed up in the deeds of trust to secure repayment. You owe the money. Just because something got screwed up and they can't foreclose on the house doesn't mean you get out of owing the money or you can make the bank take the house. In fact you could make the bank take the house if you DID give proper security, but not if you didn't and refuse to correct that. As for getting out of the house and the loan, if you don't correct the problems with the deed of trust, the bank will sue you for the debt. That is FAR worse on your record than a foreclosure. Your only other option if they will not do a short sale, is a deed in lieu of foreclosure. The bank may take that, especially since it saves them the trouble of making you correct the security. You just sign the house over to the bank by deed, instead of deed of trust and a foreclosure. But that doesn't look much better on your record than a foreclosure. The bottom line is that not repaying a real estate loan is going to ruin your record no matter what. Refusing to work with the bank to solve a problem with the paperwork will only make it worse.

I agree with Mr. McCormick in that your are failing to recognize that you have a debt to a lender. As he pointed out to you in an earlier response, a secured loan has two parts, a promissory note and a security instrument, which is the deed of trust.

I'm not so sure, however, that the security is invalid. You do not state that you did not sign the deed of trust, in fact it is implied that you did. Your only beef with the deed of trust seems to be that the notary named the wrong county on the deed of trust. The notarization is required for recordation, which is essential only for the lender to put the world on notice of its security interest in your property. Thus if the deed of trust is not recorded, it only creates a priority problem between the lender and other parties who record liens or take title to your property without actual notice of the deed of trust. If it was recorded, arguing that it shouldn't have been recorded is an exercise in futility.

Rescission is a remedy when there has been fraud in a transaction. You haven't shown any fraud, only a clerical error by a notary, a stranger who is not a party to the transaction. Even if you could show fraud, a judgment of rescission would require you to pay back the money you borrowed, in exchange for cancellation of the instrument.

I see no prohibition from the lender at least filing an action against you for foreclosure, if they have possession of the promissory note that you signed and the deed of trust.