Legal Question in Real Estate Law in California

Real Estate Fraud

A loan and escrow officer mislead a person selling their home. The seller was told the buyer did not have the money to close the deal and asked the seller to carry a second on the transaction. The seller was told later to sign an amendment saying the second would be handled seperate from the first transaction. The seller did not know she was signing an addendum seperating her from the second on the property altogether. After the transaction had closed she was instructed to wire the buyer $27,000. Because she was given a straight note and a deed of trust on the property she thought she was carrying the second. The loan officer and his wife were buying the property and he did the loan on the transaction. After the seller wired the money two days later the loan officer refied on the property for the exact amount the seller wired them, in my opinion to appear as if she was carrying the second. Now the home is in foreclosure. Can the seller sue for their $27,000.


Asked on 4/04/07, 3:49 pm

3 Answers from Attorneys
Judith Deming Deming & Associates

Re: Real Estate Fraud

Yes, and I agree that it appears the loan officer is a crook and if escrow aided and abetted the fraud, name them as defendants too. If the loan officer is a licensed agent, file a complaint with the Department of Real Estate.

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Answered on 4/04/07, 5:17 pm
Anthony Roach Law Office of Anthony A. Roach

Re: Real Estate Fraud

Not if the debt is secured by a deed of trust. You would not be able to sue solely on the note unless the foreclosure is complete and your security interest is wiped out. If the refinance lender is foreclosing, your note is senior and your lien survives and you can foreclose.

Many of the terms that you use in your post are confusing. What do you mean that the seller is separated from the second?

Very truly yours,

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Answered on 4/04/07, 7:17 pm
Larry Rothman Larry Rothman & Associates

Re: Real Estate Fraud

You may have a valid defense. We would have to review your paperwork and correspondence as well as the escrow company's documentation.

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Answered on 4/05/07, 12:54 pm


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