Legal Question in Real Estate Law in California

Four years ago were all set to short sell a house that was sinking us, had sellers lined up, bank approval to sell, when the Mortgage Insurance Company scuttled the short sale unless we agreed to pay them $80,000. We thought this unfair, it's not like they held a 2nd mortgage, but when they actually canceled the short sale we acquiesced to paying $40,000 over 20 years make the sale happen, agreeing to pay them $166.66 a year, essentially until we are dead. Two months ago we bought a home again (same neighborhood even) and a realtor told me this action, forcing a promissory note as a condition of short sale, was illegal and we should seek council. They said they should have to pay us back what we paid them, for a MI relationship is between the Bank and the insurer, not us. I don't have the money to chase wild geese. Do we have standing?


Asked on 5/27/14, 12:13 pm

1 Answer from Attorneys
Anthony Roach Law Office of Anthony A. Roach

You need to have the entire transaction and the paperwork reviewed by a competent real estate attorney. Mortgage insurance is normally between the lender and the insurer, but you may have signed documents with other provisions.

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Answered on 5/27/14, 12:44 pm


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