Legal Question in Real Estate Law in California

Re: third deed of trust

The obvious risk is that you can kiss your money goodbye. You should be aware that if either the first or the second carries out a foreclosure, your security interest (the deed of trust) will be wiped out. The only recourse then would be to sue the parties to recover your money. You need to ask yourself this: the parties could not keep two loans paid and current, can they keep THREE loans paid and current? Also, is there even any equity in the property? Not likely; have they paid the property taxes or the insurance? If you want to make a loan out of charity, then fine, but it is a foolish investment.