Legal Question in Real Estate Law in California

If you name is on the title, that signifies that you are a/the legal owner of the property, or a recordable interest therein. Title equates to ownership. A person who is an owner may or may not be a borrower, and a particular loan may or may not affect the person's ownership interest.

If you are "on the loan," that would mean that you are a borrower, or possibly a co-signer or guarantor, of the loan. A person who is a borrower (sometimes called "trustor," "obligor," or "debtor" with slight shades of different meaning) may or may not be an owner.

Since only owners can put up property as collateral for a loan, most people who are "on the loan" are, or at the time the loan was made were, owners; if not, they are non-owner co-signers, sureties or guarantors.

Note that owners who are not borrowers may or may not lose their interest in the property if the loan is foreclosed. It depends upon whether their interest was made collateral for the loan.

Note that foreclosures result in someone's loss of some interest in the property, by definition. This is likely to be an unfavorable development for any owner, whether on the loan or not.

Finally, under California law, a lender generally has to foreclose on the collateral before seeking recourse to the borrower(s), and in many sets of circumstances does not have recourse, or elects not to seek recourse because it is slow and expensive.

If you are on tite with someone else, you may be liable for part of the maintenance of the property, which includes taxes, insurance, repairs and interest on the property loan. Not to the bank, but to the other co-owners. However, if someone took out the loan in their name and then deeded it to you, then they are legally obligated to the lender, even though you are not. The bank can still foreclose, and depending on the situation and the type of foreclosure used, could obtain a deficiency judgment against the original borrower.