Legal Question in Real Estate Law in California

Re: Real estate /deeds

Whether it is legal or not, it would be fruitless, if your thought is that it would prevent foreclosure. The lender's right to sell the home at foreclosure is based on the priority in time of the recording of your deed of trust to the lender. In legal effect, you have already sold your home to the lender by giving it a deed of trust.

Further, transfers of property to relatives for less than fair market value are fraudulent if the purpose or effect is to "hinder, defraud or delay" any creditor, existing or suspected. In this case, your proposed transfer of title to your son would probably not be fraudulent, even if you made him a gift of it, because the lender's rights are not impaired and/or because there is no net equity in the home, but it is certainly a suspicious deal and would raise questions.

Finally, giving property to the next generation (rather than passing it on by will or trust) usually has bad tax consequences. There is nothing to be gained by your idea and perhaps much to be lost; at best, the result is a wash.

Re: Real estate /deeds

Nice try, no brass ring. The property remains liable, along with you and any subsequent owner, for the debt.

Re: Real estate /deeds

Whatever you do will not change or alter the lender's rights. If you signed the promissory note, you are liable for payment. Those who didn't sign are not liable. If the lender forecloses, it doesn't matter who appears on title as the current owner. The lender can still foreclose. The lender will have a deed of trust recorded on title to the property, giving the lender the right to foreclose.