Legal Question in Real Estate Law in California

Forecloser
Can your home be foreclosed on by the lender who holds the 2nd when the 1st is almost 3 months behind? We have never been 30 days late on the 2nd.
The current holder of the 2nd has told us that he will be paying to catch up the 1st so he does not loose out on his money and we are to give him the money. The 1st has not been paid as he has stated and I will not send him the money. We will taking care of the 1st mtg with that lender and only that lender. He calls us 5 times day and threatens to foreclose on us and his last call today states ''sorry but he is forclosing right now.
Help, not sure what to do.
Thank you in advance for all your help.

Asked on 10/16/07, 7:47 pm

2 Answers from Attorneys

Bryan Whipple Bryan R. R. Whipple, Attorney at Law

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Re: Forecloser

There are more ways to default on a loan than merely not making the payments. Probably your 2nd DT has a covenant that you will keep the first paid up. If you fail to do so, that may be a default and may entitle the holder of the 2nd to foreclose. Even without such a covenant, the junior lienholder appears to have the right to cure a default on the senior loan, and in fact has an incentive to do that because the senior lender cannot then foreclose but the junior can. See sections 8.71 and 8.72 of the CEB publication "California Mortgage and Deed of Trust Practice" at your county law library for a discussion of the rights of junior lienholders and their reasons for curing senior defaults. See also Civil Code section 2924c authorizing parties to cure defaults. The long and short of it is that the holder of the 2nd is not feeding you a bunch of hooey, he is probably right and you need to take his threats very seriously.

Answered on 10/16/07, 8:41 pm

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