Legal Question in Real Estate Law in California

Re: Can his home be used as collateral in HER loan?

The basic rule is that one cannot pledge as collateral that which one does not own. Any attempt to do so is void.

A corollary that modifies this somewhat is that it is possible to pledge an interest that is later acquired. This takes care of the possibility that the deed to property may not be delivered until after the deed of trust is executed and recorded. Commercial lenders also often get a security interest in the borrower's after-acquired property.

Without knowing exactly what is written in that note, and if the note is truly non-negotiable, then your brother should emerge the winner in a lawsuit.

Keep in mind that "not assumable" is different from "non-negotiable." One limits the debtor, the other limits the creditor. Before jumping to any further conclusions, you need to verify that the note is non-negotiable. Promissory notes are negotiable unless clearly and expressly made non-negotiable.

Re: Can his home be used as collateral in HER loan?

Assumability has to do with someone assuming the obligation to pay in place and instead of the debtor (your brother), which has nothing to do with the ability to assign the right to obtain repayment from your brother (a right held by your mother). Your brother should take everything to an attorney for review, but the bottom line is that if he pays off the note in full, no one can can collect from him. Also, if your mom had the ability to transfer title, as your query states, it doesn't belong to your brother anyhow ("...my mom transferred the title to my brother's home...)

Re: Can his home be used as collateral in HER loan?

This was asked before. An attorney must look at the documents and trace the transactions. Have your brother get help by a lawyer. Free advice in this case is worth what you paid.