Legal Question in Real Estate Law in California

Multi-collateral loan, 3rd Party & foreclosure

Party A received a loan from Party B (private lender). ''A'' used her own home as collateral. ''B'' knowing that ''A'' would most likely default, wanted to use party C's home as collateral. (''A'' had a lien on ''C'''s home through a promissory note that did not allow assumption of the loan. ''A'' instead transfered 100% interest over to ''B'')

''C'' had no knowledge that this transfer had happened and was stiil paying ''A'' for the note. ''A'' defaulted to ''B''. Can ''C'' fight the upcoming foreclosure?

We have proof that ''A'' gave ''B'' a changed & forged note(between ''A'' & ''C'') to allow title change.

''A'' is a Paralegal (estates/trusts)

''B'' is a Real Estate Agent

They are each others clients and friends. Is what they did illegal / unethical?

We can prove that ''B'' was aware of the changes That ''A'' made to the Promissory note(including forgery) between ''A'' & ''C'' before B & A's loan went through. '' ''B'' is claiming that the loan between ''A'' & ''B'''' was done in good faith so she is entitled to foreclose on ''C'''s home.

Since ''A'' defaulted on ''B'''s loan,

''B'' now wants ''C'' to pay the loan for ''A''. Can ''B'' foreclose on ''C'' and/or make him pay?


Asked on 1/08/08, 4:24 pm

1 Answer from Attorneys
Lyle Johnson Bedi and Johnson Attorneys at Law

Re: Multi-collateral loan, 3rd Party & foreclosure

Consult with an attorney. There is a lot at stake. If the payments were made to the location that was specified by A and no notice of the change was given by either A or B that payments should be made to another location, payment to the specified location may provide a defense.

Most notes secured by real property can be sold or transferred to a new note holder. However, the individual transferring the note and the receiver of the note should give written notice of the change and the place at which payments should be made.

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Answered on 1/12/08, 2:13 am


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