Legal Question in Real Estate Law in California

Re: Note sucured by Deed of Trust

The foreclosure will not extinguish the note. However, if the borrower is in foreclosure, are there other assets with which to satisfy a judgment?

Re: Note secured by Deed of Trust

Whether you can pursue a judgment on the note depends on factors such as whether the proceeds were used as purchase money for the property. See a lawyer immediately. Tell the lawyer how it was you managed to invest 100% of your retirement nest egg in very risky investments such as 2nd deeds of trust.

Re: Note sucured by Deed of Trust

The answer is probably yes. If you hold a second deed of trust, and the first is foreclosed but doesn't produce enough cash to pay you off (as is the usual case these days), you will lose your collateral and become an unsecured creditor of the borrower. Aftey your collateral becomes worthless you are no longer bound by the "collateral first" rule and you can sue on your note just like any other non-mortgage-type note. You are likely to win and get a judgment; when that happens, you can record an abstract of judgment in counties where the borrower has other assets and foeclose on them.

There are unusual situations where it isn't so straightforward legally, and debtors can throw roadblocks in your way, but with patience and care you are likely to prevail in the end.

Your should also ask any lawyer representing you to look at the possible application of laws against elder abuse or mistreatment of dependent adults under the Welfare and Institutions Code and other applicable statutes.