Legal Question in Real Estate Law in California

In a "Race- Notice" State, WHAT 2, MAIN "Causes Of Action" for "Lender Liability" could the "Bona Fide Purchaser" FILE against a Lender, if a Loan was Fraudulently done on the Property by someone OTHER THAN the BFP.

But the BFP's Status Could be verified by their "Recorded" their interest in the Property PRIOR to the Fraudulent Loan, thus giving the Lender (or their Title Insurer)"Notice", BEFORE they had approved the Loan?

And if the Lender proceeds to Foreclose, based on the Outstanding Debt for the Loan, what kind of "Wrongful Foreclosure" Claims be filed by the BFP?

These questions pertain to ONLY to the "Lender's Liability" for their role in the Fraud("Actual or "Constructive"), NOT the obvious Liability of the one who actually committed the Fraudulent act.


Asked on 10/23/12, 2:25 pm

1 Answer from Attorneys

The BFP could file an action to quiet title. That's it. There is no wrongful foreclosure if the BFP fails to act to clear title before the foreclosure. If the BFP can make out a good prima facie case in an injunction motion as part of the quiet title action, the foreclosure would be stayed pending the outcome of the quiet title action. So if the BFP sits on their hands instead of seeking relief, the lender is not going to have any liability and the BFP will be out of luck in favor of the new BFP who buys at the foreclosure sale. You need to realize, however, that based on the chain of transactions you described in your previous questions here, there is no BFP in your case at all. The lender may or may not be a bonafide ENCUMBRANCER for value, but there is no bonafide PURCHASER for value in your case. You really need to stop these postings and see a lawyer. You are really going to make a mess of things for yourself if you keep this up instead of getting the help you need.

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Answered on 10/23/12, 2:49 pm


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