Legal Question in Real Estate Law in California

Re: sharing in second trust deed

Probably. I think there may be no case law on it but it would make sense that you can. Beware however, as soon as you foreclose the first will also foreclose and that foreclosure wipes out any junior lienholders. If the proprety sells at the foreclosure sale for more than the first, you would get a pro rata share of the excess. But it will not. You will have to buy out the first loan; then you would foreclose and wipe out the 70% interest on the second. Maybe the other second deed holder does not want to foreclose because they realize that?

Re: sharing in second trust deed

I seem to recall reading in a treatise on California mortgage and deed of trust practice that any co-owner of a note secured by a deed of trust may initiate foreclosure, and that forces foreclosure of the entire obligation on behalf of the other co-owners of the obligation. That would conform to Mr. Shers' opinion. This assumes there is no private agreement to the contrary among the co-owners of the note; if there were an agreement to the contrary, it would still not prevent the foreclosure, but it would make co-owner X liable to co-owner Y for any damages for the breach of the private agreement.