Legal Question in Real Estate Law in California

You might consider filing a small claims suit against him now. He's the one obligated to pay, since he agreed to do so, and you acted based upon that agreement.

If the trial is held after the property is foreclosed, you might discuss the lawsuit with the purchaser and perhaps add him/her/it to the suit as a defendant.

Whether a small-claims suit iagainst the neighbor s likely to be worthwhile may depend upon the value of your time and your guesstimate of the odds you'll be able to collect on a judgment. If the guy is of good character and financially solid other than a bad loan and maybe some temporary situation that got him in financial trouble, you chances are better that if he is a jerk, is unemployable, has a drug, alcohol or gambling problem, etc. Frequently collecting a small-claims judgment is more time-consuming than filing the claim and preparing for and attending the hearing (trial).

There are some theories on which you might sue the bank, but I think most judges would think, as I do, that the bank's connection to the fence deal is too remote for them to be roped in on an "unjust enrighment" or "quasi-contract" basis.