Legal Question in Real Estate Law in California

It depends. If the correct amount of the note would still be secured, then it would seem that nonjudicial foreclosure would still be available. The statute of limitation on a written contract (promissory notes are goverened by the 4-year statue) does not begin to run until there has been a breach, or the agreived party becomes aware of the breach. If payment on the note are current, there has been no default so the statute of limitations does not begin to run. Moreover, there may be a difference between the interest rate on the note and the APR, which would account for a difference (lenders frequently quote an interest rate, but the loan documents use a different APR for purposes of amortizing the loan).

You really need to take the note and deed of trust to an attorney in your area whose practice emphasizes real estate and have them look at the documents to determine what is going on. Spending a relatively small amount for the advice of an attorney who has actually looked at ALL of the documents (including the loan documents if available) would be better than trying to figure it out based upon a response in this type of forum. Making a mistake in this type of situation could cost far more than a simple one or two hour consultation with an attorney.

Mr. Hoffman is correct and you should heed his advice. I answered your prior question before. There is no different statute of limitations for a judicial versus non-judicial sale.

Your situation is way too complex to be solved on a bulletin board.

First, you need a determination by a lawyer who is very sharp on mortgages and deeds of trust to examine the instruments and advise you first whether they amount to a mortgage, an equitable mortgage, or a deed of trust; i.e., is a lien created or is title transferred in trust to a trustee by the instruments; and second, is there a power of sale. It is possible to have a mortgage with a power of sale and it is possible to have a deed of trust without a power of sale, both circumstances being very unusual, but they do happen.

Next, as to the statute of limitations - there is no statute of limitations for a trustee sale under a power of sale in a deed of trust, despite what another lawyer wrote. The only time limitation is a very lengthy one under the Marketable Record Title Act. The statute of limitations for a mortgage, on the other hand, is four years on an obligation in writing (such as a promissory note), two years in the rare instance of an oral promise to pay, and arguably it could be six years if the obligation secure by the mortgage appears to be a negotiable instrument, thus invoking Commercial Code section 3118. Distinguishing between the four year and the six year limitations period, and what triggers the beginning of the period, calls either for an expert or a semi-expert willing to do some research.

Further, even if compound interest isn't mentioned in the instruments, it's possible whomever whote them had compound, rather than simple, interest in mind. Or possibly someone just made a mistake!

Finally, don't overlook the possibility that the note is usurious. As I said before, that doesn't render it void, it merely renders the interest uncollectible, and if it has been collected and paid, subects the payee to potential treble damages.

I agree with Mr. Whipple. Contrary to what Mr. Shers stated, there is a different statute of limitations for the exercise of the power of sale in a deed of trust, which is governed by the Marketable Record Title Act (MRTA). Under the MRTA, the time limit to exercise the power of sale is 10 years from the maturity date, if the maturity date or date of last payment is ascertainable from public records. If the date is not in the public records, then the limitations period is 60 years after the instrument is recorded.

A deed of trust must secure an underlying obligation. If there is no underlying obligation, the deed of trust is a nullity. In your situation you have an underlying obligation, but it would appear from your post that there is a discrepancy over interest. I suggest having an attorney review the promissory note, and the facts in detail, to determine whether you have a usury claim.