Legal Question in Real Estate Law in California

If you have grounds against anyone involved in the purchase for 'mistake' or fraud, then you could bring legal action to correct it or rescind the sale contract. The same applies to the mortgage - you would have to have proper grounds to bring action against the lender for 'mistake' or fraud.

This question really puzzles me as to exactly what you mean.

If you have borrowed money, the likelihood is that you will continue to owe that borrowed money to the lender until you pay it back. The main exception I can think of is that if you default on the loan and the lender forecloses by trustee's sale, the lender has to be content with what the sale brings in, and cannot sue you for any shortage (deficiency).

The effect of "mistakes" on the purchase agreement can have a variety of legal consequences, or none at all, depending upon whether the mistakes are trivial or serious, and what aspect of the purchase deal they impact. The effect of "mistakes" may vary depending upon when they are noticed, and who is at fault. Some of the possible results of mistakes in a real-property purchase agreement are:

(1) The mistakes can be corrected in escrow, before it closes, when the buyer and seller agree there is a mistake and give the escow holder corrected instructions;

(2) An affected party can initiate a special kind of lawsuit to ask a court to make an order correcting the instrument;

(3) A party covered by title insurance (buyer or the buyer's lender) might make a claim on his/her/its title insurance;

(4) If the mistakes are insignificant, the parties can live with it.

Of course, if the lender has not yet funded the loan, it can back out if not happy with the accuracy of the contract of sale, or can withhold funding the loan until the mistakes are corrected. This is not the same as canceling debt - this is declining to extend credit.

Since none of this is likely to answer your real question, I suggest you re-ask it, giving us ten or so sentences of explanation instead of a cryptic one-line question.

Mistakes may be reformed but fraud may not. Contact me directly.