Legal Question in Real Estate Law in California

Re: 2nd trust deed

If you do not have a provision for a penalty for late payments, which I assume you do not, you probably can not charge him any penalty. You could insist on another month of interest. I would insist on getting exact information as to the refinancing as it might not have been approved yet, etc. You could say that unless you have that information and are compensated for his being late, you have no choice but to start foreclosure proceedings and he will be liable for those costs.

Re: 2nd trust deed

There is something a little suspicious about the trustor's claim that he is 10 days away from refinancing. If he were, normally you should have received a demand for pay-off information from the new lender. An exception would be if the new loan was to be a third, but it would be illogical for the trustor to take out a third D/T and then turn around and pay you off after closing.

By the way, your question says your note is due tomorrow 5-17-07 but it was not posted until 5-18 (and I'm writing this answer on 5-19). Has anything happened in the meanwhile?

One other thing that bears mention is that you may have been required by Civil Code section 2924i to have given the trustor written notice of the balloon payment.

As to extra interest and penalties, you are pretty much limited to what is written into the note; any greater charge might run afoul of the security first or single-action provisions of Code of Civil Procedure section 726.