Legal Question in Real Estate Law in California

I'm in California and just had my home mortgage re-financed. As part of that activity we took out additional funds to pay off some loans. The title company took responsibility of paying off the loans directly (rather than giving us the cash).

As part of that exercise we had to provide the title company all relevant information by which they could issue the checks and mail payment to the company managing the loans. As it turns out, the title company got sloppy and didn't pay off loans we asked them to while paying off loans we didn't ask them to.

Unfortunately, they paid off the low interest loans first (the one's who's interest rate is lower than the mortgage interest rate) and left us with the high-interest loans (the ones we were trying to consolidate in the first place.

When I requested the title company to fix it, the response I received was "tough". I can calculate that the mistake results in roughly $900 of additional interest in the first year alone. Do I have a legal case against my title company, or can they pay whichever loans they choose?

Thanks,

John


Asked on 1/12/11, 8:10 pm

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Before you decide to go on the warpath against the title company, look carefully at the instructions it was given as to whom to pay, which loans to pay, etc. It may in fact be that it was instructed to pay certain loans, and not others, by your new lender. The title company doesn't have discretion, but be sure rwhose instruction it was following. If after looking at all the instructions it is clear that they disobeyed or disregarded the instructions, I'd say they were negligent and owe you damages, which maybe can be addressed adequately in small claims court, your quickest and cheapest enforcement route.

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Answered on 1/17/11, 9:44 pm
Anthony Roach Law Office of Anthony A. Roach

The title company is not going to have any liability unless it handled the escrow. I would look at that issue first. What is important here is what the terms of the escrow instructions for the refinance stated. Those terms are going to determine whether the escrow has any liability.

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Answered on 1/19/11, 1:16 pm


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