Legal Question in Real Estate Law in California

Re: Real Estate Law California

Huh? How do you plan on selling property you don't own? Those lenders have Trust Deeds against the property that have to be paid off from sale. No buyer in their right mind is going to pay you anything without getting clear title through escrow.

Re: Real Estate Law California

Most of your facts do not make sense to me. if you are the sole owner, why did the banks glive a loan to your ex-husband on property that he did not own? They would not because they want security for the loan and yo claim he had no interest in the property. If the loans are secured by a mortgage on the condo, and the loans are worth more than the fair market value of the condo, anyone buying the condo would have to pay enough to cover the loans or you and/or your ex would have to make up the difference. So you can not make any money by selling the condo.

You can transfer your interest by a quit claiming it; sles of real estate do not have to go through escrow. But if you want to be able to sell it or take out a loan against it, the lender is going to require a title search and escrow. Likewise, your friend should get title insurance.

Re: Real Estate Law California

Whoops! Either your friend, or you, or maybe both of you, fail(s) to appreciate the significance of a mortgage (actually, a note and deed of trust) on the value of real property.

If, for example, a house has a market value of $300,000, but has two loans for which it is collateral totaling $275,000, the seller cannot deliver marketable title to a buyer without applying $275,000 to pay off the liens. If the buyer were to pay $300,000 and the liens were not paid off, the buyer would be getting a property with a net value of $25,000 and thus would be defrauded to the tune of $275,000, and would soon find that out when the now-unpaid noteholders foreclosed.

It is a pipe dream to think that not closing through escrow avoids this reality. Escrow isn't a nasty purgatory where all must recant; it is simply a process by which all the cards are laid on the table - and is normally necessary to get title insurance.

It is legal to sell by quitclaiming title. One does not quitclaim a prior deed. Remember that deeds are vehicles for doing a transaction, and not the title or ownership itself. A deed is just a piece of paper, and once recorded, can be thrown away, just like a canceled check. However, if you quitclaim and represent to the buyer that they are getting $300,000 worth of property, you are in for a fraud suit. Until those liens are paid off, the property (in my example) is really only "worth" $25,000.

In a case like yours, you should re-examine the property settlement under which you took this property subject to mortgages he was obliged to pay. If he doesn't pay, the lenders will foreclose. You will lose the property. He may or may not be sued for whatever the foreclosure proceeds don't cover, but that won't help you a bit; you'll be evicted by the buyer.

Go back to your divorce lawyer. You may have gotten less that you think, or less than you should have. You may have little or nothing to sell to your friend in terms of marketable values.