Legal Question in Real Estate Law in California

Re: Escrow papers have someone elses name as legal owner

First, let me say that based upon the discussion of legal owner, and HUD home, I assume you are talking about a manufactured home still registered with the Department of Housing and Community Development (in other words, not combined with the land it sits on, and transferred by virtue of a recorded deed). If the foregoing assumption is not correct, then the following is not a correct discussion of your situation.

It is not uncommon for a lender (individual or institutional) to transfer their lien against your home to someone else. In effect, that is done very regularly, and in the case of institutional lenders (banks, mortgage companies, etc...), it is the rule, not the exception. In your case, its a little bit different in that the lender is your friend, however, I don't believe that affects his ability to transfer the loan to someone else. Its going to require a full review of the documentation for your loan - one of the things that often happens with loans like this is that the lender fails to comply with the various requirements imposed upon them by State and Federal Laws in terms of disclosures they must make prior to your accepting the loan. I can almost guarantee that they failed to make those disclosures. The real question is, however, what do you want to do? Can you force them off title in favor of your friend - probably not - they are the legal owner if they own the loan. Can you go after escrow - only if they changed documents after you signed them, and even then, what are your damages? I assume you are making the same payment, paying the same interest, so how are you damaged that they are on title instead of your friend? You really aren't, so I'm not sure you have grounds to do much of anything.

By way of explanation, with HCD registered HUD-Code homes, a "legal" owner is solely a lienholder. In essence, just like the lienholder on your car, or the mortgage lender on a site-constructed home, the lienholder owns only "beneficial title" to the property. As registered owner, you are the owner of the property, subject only to the lien in favor of your lender. Unfortunately, the term "Legal Owner" confuses a lot of people, and they are concerned that somehow that person has complete ownership of their home - they do not. Call me if you have more questions, or you want me to look at the loan you received.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.