Legal Question in Real Estate Law in California

Cross Default Provision in CA Deed of Trust securing investment real estate

I am a private lender and I have financed multiple notes to a single borrower.

The loans are for California single family residences as collateral . The loans are business purpose loans and the properties are not occupied by the borrower.

The various deed of trust (standard Fannie Mae form 3170) have the below mentioned cross default clause in them. Each the notes are secured by a single property. There is no cross collateral.

Does this mean that if the borrower defaults on one of the notes, Will I be able to foreclose on the note in default and also include the other collateral for the other performing notes in the foreclosure?

I. CROSS-DEFAULT PROVISION. Borrower�s default or breach under any note or agreement in

which Lender has an interest shall be a breach under the Security Instrument and Lender may invoke any of the remedies permitted by the Security Instrument.


Asked on 4/07/13, 6:17 pm

1 Answer from Attorneys

You would have to do separate foreclosures for each property.

Read more
Answered on 4/08/13, 11:18 pm


Related Questions & Answers

More Real Estate and Real Property questions and answers in California