Legal Question in Real Estate Law in California

Re: Lien on property in return for a loan.

Talk to your escrow company, they need to do the paperwork as part of what you're paying them for. You're likely going to have trouble getting a 1st loan if you are borrowing for a 2nd. Good luck.

Re: Lien on property in return for a loan.

Attorney Nelson is correct, however, escrow companies are not, in their basic fee, being paid to prepare loan documents. They can prepare a deed of trust (the security for the loan), but they will likely charge you for doing so. I would suggest that you are better served to have an attorney draft the documents for you (a deed of trust, promissory note, security agreement and all of the other disclosures required even in a private loan such as this). One HUGE red flag your post raises, and Attorney Nelson alludes to is the question of that $50,000. If you are lying to a lender, and telling them that the money belongs to you and is your down payment on the property, you are committing loan fraud - the whole basis of the problems we are experiencing today. You must be very clear in disclosing to the lender, broker and everyone involved that you are borrowing that $50,000 and that it must be repaid, with interest, in a year. If you omit or fail to disclose this fact in your loan application, you could have a very nasty surprise when your lender calls the loan due for material ommissions. I would strongly encourage you to have the entire transaction reviewed by, and your documents prepared by an attorney to make sure they are done correctly.

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