In the typical California home loan foreclosure, The first loan forecloses, and the second loan against the property loses its security. The question then becomes whether or not the borrower will be personally liable for the debt on the second loan. If it was a purchase money loan, the borrower…
It is widely understood that in California, when it comes to owner-occupied homes, if the seller carries back a loan, taking a deed of trust to secure the purchase price, if the buyer defaults on the loan the seller may not obtain a deficiency judgment. The seller is limited to…
The Fair Debt Collection Practices Act (FDCPA) was enacted by Congress with the intent to police the coercive, unrestrained activities of third party debt collectors as distinct from debt servicers. It provides a number of claims and remedies for California debtors. I recently wrote about the decision in which a…
Loan modifications for California homeowners has become less a rarity in recent times. A loan modification is an enforceable contract between the borrower and lender, and as long as the borrower performs, they will be able to keep the property. However, now as before, lenders lose track of the status…
Promissory estoppel is a legal argument and cause of action raised when one party makes a promise for which they do not receive any compensation, which the other party relies on in changing their position, such as a promise to modify a mortgage loan. If the promissor had received some…
A cross-collateralized loan is one in which a cross-collateral deed of trust which secures more than one note. The deed of trust is recorded only against property A, but may also secure notes that are otherwise secured by other properties. If the note originally secured by property C goes into…
Many California real property owners have challenged lenders foreclosure proceedings based on state and federal laws enacted the past few years to help homeowners during the real estate collapse.. In most cases, the courts have found that the laws do not create new, enforceable rights, with a few exceptions. Mis-interpretation…
A deed of trust represents security for the loan. It has several parties- a) the trustor, who is the borrower and owner of record for the real property that is security for the loan; b) the beneficiary, who is the lender whose debt is secured by the deed of trust;…
California law has had a persistent rule that, when it comes to real estate loans, a lender does not own a borrower any duties beyond those expressed in the loan agreement, except those imposed due to special circumstances. Courts rarely find those special circumstances, and hold lenders and buyers to…
California home buyers often get both a first loan and a second, usually a home equity line of credit, or “HELOC.” Generally, when a second loan is made by a different party, not as a part of the purchase, when the first forecloses, the value of the junior’s security has…