Legal Question in Real Estate Law in California

Re: Home Equity

Anyone can sue anyone for anything. All it takes is the cost of a filing fee (approximately $325.00) and a complaint alleging some cause of action. However, in order to be successful one must show, among other things (depending upon the theory of recovery) that they have been damaged. Bottom line is, filing a lawsuit is one thing, successfully prosecuting one is quite a different thing.

Because the house was in foreclosure, she may argue that you violated the preditory lending laws by purchasing her home without following the proper procedures for doing so. Also, although you state that she "never paid a dime in the mortgage or bills," you also state that it was her house. If it was her house, she obviously paid something to someone in order to take title.

If she has paid anything toward owning the house (I suspect that she has), she could argue that she is entitled to some amount of money for any increase in equity that occurred between the time she purchased the property and the time you bought it.

I strongly suggest that you make an appointment to see an attorney in your area that practices real estate litigation, take all of your documents to your appointment, and discuss this matter in some detail.

Re: Home Equity

I believe I answered a question for you earlier, as to whether you had to go through any eviction formalities to cut off this lady's possible right to return to the house, and I told you that for most situations fitting your facts the ex-girlfriend would have no rights as a tenant and no right to re-enter the house. I still think that's true, but as I pointed out in my first answer this depends upon it being factually true that you were sharing the house before she moved out and that she didn't have a separate suite or apartment in the house which was locked off and you didn't have the right to come and go.

Now, you are describing in relatively few words a relatively complex set of transactions, apparently used by you to finance your acquisition of the house just before the foreclosure.

I really don't understand what you could possibly mean by "....to show the value of the home was still good we did two loans." Who were you trying to show? Why? Usually lenders determine the value of a home by having it appraised, not by having the borrower get two loans. This part of you story makes no sense. If there is a reason why you got two loans and then paid one off, I don't get it.

Then, why would she sue YOU for the money borrowed and repaid? You didn't benefit at all, as I understand it, much less did you benefit at her expense.

One answer you got suggests that the purchase before foreclosure was improper or regulated under the home equity purchase law. However, as I understand that law, your purchase was exempt because you intended to, and did, make the house your principal residence.

The answer to this confusing puzzle may lie in the deal you made to buy the house. Were you supposed to pay her something for her interest? Did you pay everything you promised? Was there a written agreement? Is your deed recorded? Does it show you are the sole owner? In addition to buying the house, did you handle all the pay-offs associated with the defaulted mortgage? Did you cure the default or refinance the old mortgage?

Too many questions here to give you a reliable answer!