Legal Question in Real Estate Law in California
Interest rate switch and bank not on deed
I recently recieved a note from my lending company stating my adjustable rate mortgage went from 6.1% to 8.1% starting next month. That's a 400 dollar a month increase. Looking over the copies of my loan docs, there are boxes checked everywhere that it is a fixed mortgage loan and not an adjustable. The actual note, according to the company has my signature on a document with adjustable stated. After the 50 pages or so of loan docs, I saw all the truth in lending and california disclosure papers with fixed as the type of loan and may have messed up on the note. Do I have any option here?
Also, the mortgage company never recorded any change to my deed of trust. They are not on my title to my house from the loan 3 years ago. What implications does this have?
2 Answers from Attorneys
Re: Interest rate switch and bank not on deed
Send them copies of some of the loan docs with a certified/return receipt letter saying it's FIXED, FIXED, FIXED. Dispute the change immediately, and ask for an explanation. Besides, 8.1 percent seems high, anyway. Sounds very fishy. If it comes down to it, you might have to engage a lawyer in your area to file a court action, perhaps to enforce the agreement or a declaratory relief action and injunction.
Re: Interest rate switch and bank not on deed
Also, the lender does not appear "on title." Lending against real estate does not make the lender a legal owner. All the lender has is a kind of equitable interest - a special kind of lien - that includes a power of sale if you default. Only legal owners appear "on title." Of course, the deed of trust or mortgage would be recorded and would show up in a properly-conducted title search.
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