Legal Question in Real Estate Law in California

2nd Mortgage company quit claimed to allow modification.

First, thank you for reading my question.

I was in danger of forclosure 4 years ago so I asked my

first mortgage company to ''Modify'' my loan to add the back

payments to my principle. They agreed if I got the

second mortgage company to ''Quit Claim''. I paid $5000

to have this done and I thought that the matter was closed.

Now I am being threatened with forclosure by a new company

that claims to own the original 2nd Trust Deed.

I have lived in this house for the entire time and I haven't

heard anything from them until now. Can they do this?

I don't have any paperwork to prove my story.

Why did they wait so long?

I have sent a certified letter disputing their claim.

Now I'm awaiting copies of documents from the first

mortgage company that may shed some light. I already got

copies from the County Recorder, but they don't show a

quit claim or anything else recorded regarding the 2nd.

Sorry for the long description.


Asked on 3/28/03, 11:54 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: 2nd Mortgage company quit claimed to allow modification.

"Quit claim" is probably not the right term for what the holder of the first asked.

Often, when a first mortgage is modified, it loses priority, so that the second may come into first position. The holder of the first probably asked the holder of the second to subordinate to the modified first.

Next, a new company holding either a first or a second is not at all unusual. Mortgages are often bought and sold. The new creditor steps into the shoes of the old. A borrower must expect this and accept it as customary. It doesn't increase or lessen your financial obligation, of course; you just pay someone else.

If you are now being threatened with foreclosure, in all probability it is because of a NEW default having NOTHING to do with what happened four years ago.

A lawyer attempting to assist from afar can never be sure, but my guess is that you are again behind on payments.

My advice is to find out exactly why the current lenders are unhappy with you, and fix it. Maybe you need a lawyer, but another possibility today is to refinance and replace the ugly first and second with a new low-cost loan, then make every payment precisely on time.

You should also take all your paperwork to a local real estate lawyer for additional advice on how to fend off the mortgage man pending a review and rationalization of your loan structure.

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Answered on 3/29/03, 2:15 am


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