Legal Question in Real Estate Law in California

Re: foreclosure

Transferring property for the purpose of "hindering, delaying or defrauding" creditors is fraud and will get both you and your friend in deeper doo-doo than you're already in.

If you are inevitably going to be unable to pay your mortgage because the interest rate and payment have re-set to more than you can afford, you are likely to be better off in the long run not getting involved in schemes that involve immoral or fraudulent schemes.

If you need more time to strike it rich or even just to find another place to live, filing bankruptcy might be a better way to buy time than trying to throw roadblocks in the way of foreclosure by adding parties to the title at the last minute. I wouldn't even do this if the only purpose is to postpone the inevitable. I assume you have talked to your lender about restructuring and have been turned down; if not, this is also a possibility, but it's pretty late in the game to be asking for mercy.

Re: foreclosure

Mr. Whipple gave you an excellent answer. The one thing I would add is that you might want to report your "friend" to the police. I do not think that transferring any portion of your title would have any effect. The lender gave proper notice at the time of default and any new buyer takes subject to your rights but also your problems. There has been no payment to the lender on the 1/8th he is getting so why should that part be separated out; if what he suggests were possible, everyone would do it and lenders could never foreclose. And why do you have to pay him $1,100 per month? For a criminal act that will not work you are giving him 1/8th of the property and $1,100. Great friend you have.