Legal Question in Real Estate Law in California

Re: Deed in Lieu of Foreclosure - Property held jointly

A deed in lieu of foreclosure is a means of ending a foreclosure proceeding by what amounts to surrender......the borrower simply says to the creditor, "here, you take it." The borrower may get some cash back if there is equity in the property.

Of course, one cannot sell what one does not own. You did not say whether the California home was held as community property (more usual) or as joint tenants or tenants in common (less usual, but not rare). The effects would be different; if it were community property the deed would be voidable by you; if joint tenancy or tenancy in common, the deed could be effective as to his half interest, but not yours.

Another fact not given here is whether you were legally separated.......a true legal separation (as opposed to simply not living as husband and wife anymore) has virtually the same property consequences as a divorce; there would have been a division of property by court order (or court-approved contract) and more likely than not one or the other of you would have received the house as part of the settlement.

If the house, or your half of the house, were improperly sold to the creditor, you would have had an action against the creditor to un-do the mischief. However, once the creditor re-sells the house to a so-called "bona-fide purchaser for value, without notice" (of the fraud or defective deed), your right to recover the house itself may be cut off, and your only remedy would be to sue the creditor to whom your husband had given the deed in lieu. It would be a suit for money damages, not to recover the property.

You may also have had an action against your husband's heirs. The bankruptcy further complicates the legal issues, as does the passage of time -- most of your rights to sue are cut off by the passage of time.

I would suggest having a real-estate attorney and/or title company in the California county where the property is located do a title search to get a better idea what actually happened, get a copy of the deed in lieu, etc.

Re: Deed in Lieu of Foreclosure - Property held jointly

In addition to what Mr. Whipple has said, if the house was in foreclosure, even if the deed could be "undone," the lender would still be entitled to foreclose unless the arrearages, together with the costs of foreclosure and interest, were paid. Hence, even if you were unable to "undo" the deed in lieu of foreclosure, you may be in no better position than you are now.

The only way to really answer your question competently, is for an attorney to review all of the documents you have, as well as to order a title search of the property.