Re: Dealing with a Life Estate Tenant

Yes (as in "yes" I know).

If the life estate was created after encumbering the total (estate) equity, then the life estate is like any other equitible interest. Lender could foreclose and (presumably) sell property to satisfy the terms of the Deed of Trust securing the Promissory Note.

If the encumbrance was only on the life estate or remaindermen's interest (created and recorded after the separation of the two, then that's the equitible interest that would be at risk of foreclosure. I've seen -and created--plenty of weird stuff (as you know) however I've never encountered a loan against a fractional, life estate interest.

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