Legal Question in Real Estate Law in California

Re: private loan fraud involving a trust

You have to tell us what the fraud was that caused you damages. Changing who the buyer is does not result in damages unless that person/entity is not paying. You can not file a lis pendens until you have filed a law suit.

Re: private loan fraud involving a trust

You keep posting this question. We are supposed to understand that not knowing the identity of your buyer somehow equates to you being defrauded. It doesn't. You received the purchase price. So what if you got paid by Donald Duck as opposed to Porky Pig. Filing a lis pendens is a fast way to get yourself in big legal trouble.

Re: private loan fraud involving a trust

It is unclear from your question whether you are buyer or seller or financier. As a general rule, if a fraud has occurred, a constructive trust may be sought and imposed over the fraudulently conveyed assets.

In certain situations, a lis pendens may be issued and recorded as part of a lawsuit that concerns the real property.

These are complicated issues, and you should seek out the advice of competent real estate litigators before proceeding. If a court determines that a lis pendens was recorded without cause, the court can (and likely will) order the payment of attorneys' fees and costs to the party that is required to seek expungement of the lis pendens.

Re: private loan fraud involving a trust

Although you do not state in your e-mail, I assume that you carried back a loan secured by a trust deed on the property. We will have to review your escrow documents and other documents that you have. If you were defrauded and want to rescind the sale, you may be able to file a lis pendens along with a lawsuit. Please contact me if you have any questions.

Re: private loan fraud involving a trust

Your query is unclear; why do you care about the names of the buyers if they already paid you and you now no longer own the property? Did you carry back a note and deed of trust on the property as part of the purchase price? If so, have they defaulted on the payments? If so, simply foreclose. If not, are you simply concerned that they will default? In order for there to be fraud you must have been damaged in some manner; how have you been damaged? The best course of action is for you to take all your paperwork to a real estate attorney for review. You cannot file a lis pendens without first having filed a lawsuit.

Re: private loan fraud involving a trust

When an ostensible buyer negotiates the purchase and intends, at closing, to have title conveyed to a third party, it is customery to insert the buyer's name into the purchase agreement and the escrow instructions as "John Doe, or assignee." That makes it clear to the seller, the escrow holder. and the lenders, if any, that when escrow closes someone other than John Doe may end up on title.

I once sold a farm to an agricultural processing company where the negotiations were carried out by the firm's president. The offer, purchase agreement and escrow instructions all identified the buyer as "John Q. President, or assignee." The buying company didn't want prematurely to disclose the name of the newly-created subsidiary that would own and run the operation for competitive reasons. All perfectly legal.

I think even failure to disclose the intention to assign a purchase contract to a third party is perfectly legal. Even if seller financing is involved, the seller cannot claim injury from an assignment, since a purchase-money lender, particularly a seller, has recourse only to the property, not the buyer.

Based on all of the foregoing, I don't think there is a fraud nor could any claim for damages be asserted with success.

Now, if you had made a purchase-money loan with a due-on-sale clause, the assignment of the purchase contract to the trust, if undisclosed, could trigger said clause; but your remedy is not to file a lawsuit, it is to demand payment under the due-on-sale clause. Only if the borrower fails to pay do you have an action, and it would be for breach of contract, not fraud.