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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Advances have to be noted in the public record Posted by Ward-CA- on October 27, 2001 at 9:22 AM In Reply to: Sr TD raised the payoff posted by Brian on October 27, 2001 at 6:51 AM : Ward, I made 3rd position loan of 12K to reinstate a first TD. 2nd TD was for 10K and was from a family member of Trustor. There was a provision in the note for borrowing additional funds on the 2nd for up to 75K. When I told the Trustor (now in default) to get paid up, he said he had borrowed the entire $75 and now I have no equity securing my TD. He was even bold enough to say he copied the cashiers check for proof and then loaned the money back to his friend, just to keep me from forclosing. It sounds like he covered his bases. Am I out of luck? Did the 2nd TD have a requirement to record the total possible loan or just the initial amount loaned? Thanks =•=•=•=•=•=•=•=•=•=•=•=•=• Brian, you can still foreclose on your unpaid 3rd position, regardless of how much money is owed on the 1st and/or 2nd trust deeds. And for your future reference, when you lend money to cure a delinquent trust deed, you should make the payment directly to the overdue lender rather than giving the money to the debtor and hope he makes the payment. If the 2nd’s promissory note contained a provision for future advances, a warning to that effect should have been on the face of the recorded 2nd trust deed. Since the note isn’t recorded, the provision in the note is of no value to the public, which has to rely on just the recorded record. Therefore, if you had no personal knowledge of the provision for future advances before recording your 3rd, and the 2nd deed of trust didn’t warn of future advances, your 3rd’s balance is senior to the non-disclosed advances! To make the public take notice of the advances and establish their priority, the 2nd trust deed holder must have a Notice of Advance recorded whenever an advance is made. I’d go to a good trust deed attorney. Ask the legal department at your local title company for a recommendation of a qualified attorney. Have him write the fool about the priorities and then demand to be paid or initiate your foreclosure. Good luck. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, I made 3rd position loan of 12K to reinstate a first TD. 2nd TD was for 10K and was from a family member of Trustor. There was a provision in the note for borrowing additional funds on the 2nd for up to 75K. When I told the Trustor (now in default) to get paid up, he said he had borrowed the entire $75 and now I have no equity securing my TD. He was even bold enough to say he copied the cashiers check for proof and then loaned the money back to his friend, just to keep me from forclosing. It sounds like he covered his bases. Am I out of luck? Did the 2nd TD have a requirement to record the total possible loan or just the initial amount loaned? Thanks : : =•=•=•=•=•=•=•=•=•=•=•=•=• : Brian, you can still foreclose on your unpaid 3rd position, regardless of how much money is owed on the 1st and/or 2nd trust deeds. And for your future reference, when you lend money to cure a delinquent trust deed, you should make the payment directly to the overdue lender rather than giving the money to the debtor and hope he makes the payment. : If the 2nd’s promissory note contained a provision for future advances, a warning to that effect should have been on the face of the recorded 2nd trust deed. Since the note isn’t recorded, the provision in the note is of no value to the public, which has to rely on just the recorded record. : Therefore, if you had no personal knowledge of the provision for future advances before recording your 3rd, and the 2nd deed of trust didn’t warn of future advances, your 3rd’s balance is senior to the non-disclosed advances! To make the public take notice of the advances and establish their priority, the 2nd trust deed holder must have a Notice of Advance recorded whenever an advance is made. : I’d go to a good trust deed attorney. Ask the legal department at your local title company for a recommendation of a qualified attorney. Have him write the fool about the priorities and then demand to be paid or initiate your foreclosure. : Good luck. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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