Legal Question in Credit and Debt Law in California

There are a several different ways to do what you are seeking. The first is to carry the entire mortgage and they make monthly payments to you. You will either have a first mortgage/lien on the property or you can retain title and then transfer title to the buyers upon full payment of the loan. This method only works if you do not have a mortgage on the propery.

The second method is to loan the downpayment to the buyer and take a secured note and deed of trust against the property. It would be best if the bank lender agrees to take their note in second position allowing you to foreclose if the buyer fails to pay you. However, you would need to disclose this transaction to the bank lender and they may not agree to loan money under these conditions.

The third way is to loan the money and obtain a secured note with deed of trust and to file the deed after the bank lender files their deed of trust. The problem with this solution is that if the buyer defaults against you or the bank, you may be out of your money under a foreclosure.

You could accept collateral but you would have to take possession of the property and keep it well maintained until the loan is paid off and then return the collateral in the same or similar condition you received it. That is a risk that you will have to be willing to accept.

Is there some reason you cannot wait and find a buyer that can pay the downpayment and allow you to get out once and for all?

You would want a deed of trust secured by the property. The problem is that the bank will likely be in first position, and there won't be much equity in the property, so you might lose that security if the buyer failed to pay the mortgage and was foreclosed on.

You can take a lien on a car or other personal property. You just need to be sure that the car has sufficient equity to make it worthwhile to foreclose in the event that the buyer fails to make payments.

I have no idea what world Mr. Jordan lives in, but the main/commercial lender would NEVER agree to subordinate their mortgage to yours. That would be insane. It is fairly common for a seller to "carry back" some portion of the purchase price. All you do is make sure that is included in the purchase/sale agreement and that the escrow company prepares a note and deed of trust. It is no different than a commercial second mortgage except you become the "lender." As one of the other lawyers mentioned, however, this is a tricky place to be. If the buyer defaults on the main loan and they foreclose you are wiped out. Under California's anti-deficiency laws you wouldn't even be able to try to collect the balance you would be owed. As for adding additional collateral, that would protect you from the weakness of a second mortgage, but would make the transaction immensely more complicated. If you want to go that route, you would need the assistance of an attorney to prepare correct documentation and ensure everything is recorded properly.