Is the loan null & void and can they foreclose on property or is only ¼ actually the banks only?

Asked by Jodie Cebolski, Anaheim, CA Tue Jul 10, 2012

Free & Clear Property was granted to 4 siblings after father’s death. One sibling bought out the other 3 for $100k each (taking out a mtg) and took title by Deed in lei in conjunction to a deed of trust, all recorded on the same day. He paid his mortgage for 2 yrs, that was only in his name, and then passed away. The property is now in foreclosure, because no one wants it. However, when all recorded docs were last pulled the deed in lei was not recorded, which was responsibility of the mortgage co at time of closing. Washington Mutual in California. The Property is still in the name of all 4 siblings, and yes they did receive a check from title for $100,000 each. Is the loan null & void and can they foreclose on property or is only ¼ actually the banks only?

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Morcos Azer’s answer
Morcos Azer, Agent, La Habra, CA
Tue Sep 18, 2012
They there is a concern about foreclosure if no one wants the property. The property is the collateral of the note, and that is why the lender wants to foreclose on the property. But as far as the impact of the foreclosure such as credit issues and deficiency, the only person(s) that will be affected is(are) the one who sign the note or guarantied the note if any.
3 votes
Thom Colby, Agent, Irvine, CA
Wed Jul 11, 2012
As others have already stated, you need to contact a Real Estate Attorney ASAP. That said, here are a couple of questions;
1) Are you ABSOLUTELY SURE that mortgage is not in the names of all 4 siblings. I've seen refi's in this same situation and 3 of the 4 siblings did not know they were on the mortgage !
2) Do you have a copy of the Deed of Trust ?
3) Do you have a copy of the Affidavit Deed (upon death of dad) transferring the property to the 4 of you and subsequently the Deed transferring the property from the 3 of you to your brother?
4) Have you contacted the Title Company who handled the Transfer / refinance / sale to see what they have in their file?

If you want, you can send me a direct e-mail and I will get some of these docs for you.

Thom Colby
Broker # 01398570
888-391-5245 Direct
0 votes
Ingrid Ski R…, Agent, Mission Viejo, CA
Tue Jul 10, 2012
Hi Jodieif the property is in foreclosure there is a way to sell it and would need more information to see if it can be sold and you the heirs receive money. Have some questions for you you may not want to answer on the Internet. .
You may want to contact a real estate attorney. I can provide one if you would like his information.
Talk to you soon

Ingrid Ski Realtor
0 votes
Mahesh Mike…, Agent, Anaheim Hills, CA
Tue Jul 10, 2012
This is great legal question...
0 votes
Brian Wilson, Agent, Laguna Beach, CA
Tue Jul 10, 2012
Hello Jodie,

Yes they can foreclose and Mona (see below) gave you a good idea, can the current note be brought up to date and then the property sold. I would call on a real estate attorney and maybe a title company since there appears to be issues or at least doubts regarding title.

My advise is not legal advise either so if you need a referral to a good RE atty let me know.

Brian Wilson, Realtor
DRE# 01321478
0 votes
Mona Bottros…, Agent, Cypress, CA
Tue Jul 10, 2012
This is not legal advise, consult an attorney: Yes the bank can and will foreclose on the property for lack of payments. Since the 3 remaining siblings are not on the loan only on the title when the property forecloses they will not be liable as they are not responsible for the loan.

Once the property forecloses, title will revert back to the bank.

The question in my mind is, does the property have equity? if it does, they "may" consider paying off the bank what's owed and selling the property at a profit later. Our company offers bridge loans, just so you know.
0 votes
one last question if the original deed in lui is found (hopefully in the copy file @ the mtg co.) would that help in anyway? Hoa is going after the 3 of them as well.
Flag Tue Jul 10, 2012
Thank you all for your words of wisdom, great help.
Flag Tue Jul 10, 2012
It's not worth it, the property is bad condition with no repairs or upgrades from the 60's but more so the loan was taken out during the high of the bubble and doesnt have the value there it would cost more to bring current than to just walk away. It's a condo not sfr.
Flag Tue Jul 10, 2012
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