Legal Question in Real Estate Law in California
Where do I begin. In 2003, my boyfriend's mother announced that she was "broke" and was going to lose one of her houses. After much thought, he decided to purchase the house for what was owed ($89,000.)to "keep it in the family". He went through all the usual steps of acquiring a mortgage and spent the next couple of years repairing the dilapidated property. In 2007, his mother decided that she wanted the place returned to her as she wished to use it as her summer residence. Of course, his answer was no after spending $60,000. to fix the place. Her response was "This is going to get ugly." A few months later we received a letter from an attorney accusing us of elder abuse and demanded the return of the home. She agreed to acquire a mortgage for,once again, the remainder of monies owed, about $79,000. by that time. The attorney we hired stated that her case was good and he suggested we return it. He then totaled our bill and retired!My boyfriend signed a son to mother trust deed, but retained the mortgage in his name to facilitate her ability to easily get financing. She never did. The deed that was recorded in the county failed to name the lender (the bank), but being the unsophisticated town that we are - the county recorder said all was OK to go. However, for the last 3 years, she has faithfully paid the monthly payments. Yesterday, she appreared in my office, dropped July's bill on my desk and stated "I'm out of money - you need to pay this". Does anyone have any ideas how we can get out from under this and away from her? We are considering default.We have been renting since this happened and have no assets except 3 older vehicles and an undeveloped patch of desert in Nevada worth $3,000.00. We are Nevada residents - this property is in California. If this doesn't sound real - you have to know we are dealing with a woman diagnosed with dementia. Please tell us where to start.
1 Answer from Attorneys
OK, starting with the purchase in 2003 for $89,000. Seeing no qualifying language, I take it this was an unconditional sale by grant or quitclaim deed, and that the deed was duly recorded. At that point, he presumably owned the house. The added information that he refinanced the loan is interesting, but only because it also relived mom of any liability on the old mortgage; the issue of who is liable for repayment of a loan has little to do with who owns the property that is collateral for the loan.
So, on what basis did mom believe she was entitled to return of the property?
Since a lawyer told you mom had a good case, I suspect either boyfriend didn't actually buy the house, or some other fact is missing from your otherwise rather complete case history.
The county recorder was correct. A deed does not name the lender. Only a deed of trust names the lender, and a deed of trust and a deed are as different as night and day -- well, night and 8 a.m., anyway.
Another interesting fact would be the difference between the loan balance and the fair market value under current conditions -- positive or negative, and how much?
California has a complex set of "antideficiency" laws that inhibit or prevent a lender from going after a residential borrower for a deficiency after a property is foreclosed in some, but not all, situations. Among the factors is whether the loan was "purchase money," and I don't have enough information to tell for sure whether the current loan was used to purchase. Other factors include the method used to foreclose -- a trustee's sale or a court proceeding. The former is almost always used, when possible, because it is quick, cheap and final -- but it does preclude any possibility of the lender going after a deficiency judgment.
I would be pleased to give you a more detailed, and free, analysis if you can provide more details, including particulars about the transfers of ownership and the refinancings. Please contact me directly by phone, FAX or e-mail.
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