Promissory Note Secured By Deed Of Trust California: Fill & Download for Free

A divorce judgment does NOT automatically remove a person from the promissory note or the deed of trust or mortgage, even if the property is awarded to the other person in the divorce. The court has no power in a divorce action to order the mortgagee or trustee of a deed of trust to remove someone as an obligor under a note, mortgage or deed of trust.The short answer is that your ex-wife can get you off the mortgage only if she does a refinance of the existing mortgage or if she sells the property and the mortgage gets paid off. In real life, those are the only ways you’ll get off.(Oh, you’ll also get off the mortgage if she keeps paying the mortgage until the loan is entirely repaid. But that might take close to 30 years, depending on the length of the mortgage loan).Read on for a more detailed answer.Mortgages and deeds of trust are technically different from each other, but in real life they’re pretty much the same thing: a way for a lender to secure a loan to the property owner or owners. Mortgages are the common form for securing real property loans in some some states, deeds of trust are the common form for securing real property loans in other states. In real life, it shouldn’t matter.In real life there are only three ways to get off a mortgage or deed of trust. The first way is to have the property sold and the note secured by a deed of trust or mortgage paid off. The second way is for the party who gets the property to do a refinance of the note secured by the mortgage or deed of trust. The third way is that the mortgage finally gets paid in full.In California, and so far as I know every other U.S. state, if you don’t get an order in the judgment for the party who is awarded the property with a mortgage or deed of trust to get the other party off the mortgage or deed of trust by a certain date (typically 3–6 months, though it can be sooner or later), and if that is not accomplished, the property is ordered sold, then the party who no longer owns the property but is still on the mortgage is stuck and is at the mercy of the party who got the property in the divorce.Here is why remaining on the mortgage or deed of trust for a property awarded to the other party in a divorce is bad news:First, that means that the credit of the party who didn’t get the property is at risk that the party who was awarded the property and presumably ordered to pay the mortgage won’t make every mortgage payment on time. If that ever happens, it will have a terrible impact on BOTH parties’ FICO credit scores.Second, when the party who didn’t get the property in the disso goes off to buy a new residence, he or she will discover that he/she may not be qualified for a loan for the new residence. That’s because lenders will still treat the obligation secured by that original mortgage or deed of trust as an obligation of both parties, even if the disso judgment assigned the debt on the property divided in the divorce to the other party. For most people, they won’t have enough income to qualify for loans that total not only the amount of the mortgage or deed of trust on the new property they want to buy but also the amount still owed on the property now owned by the former spouse.So make darn sure to deal with any existing mortgages or deeds of trust in any settlement of a dissolution of marriage action, and be sure the court deals with that problem in any trial dealing with property division in a disso action.

Given the description to the question you should consider immediately contacting legal counsel.The unapproved transfer of assets secured by a deed, trust deed, security, or another form of a promissory note is a serious issue. Taking action to protect your principal is prudent.

I’ll answer this from a California perspective. Other states have different laws.The instrument we refer to as a “mortgage” is two documents: the promissory note and the deed of trust, which secures it. The note outlines the rate and terms of payment. The deed of trust gives the lender a way to get their money back if the borrower stops making payments.There are three parties in a note and deed of trust: the Trustor (borrower), the Beneficiary (lender), and the Trustee. The Trustee is the neutral third party that forecloses on behalf of the Beneficiary in the event of default.When a lender opts for the extreme remedy of foreclosure because the borrower is not holding up their end of the deal, they instruct the Trustee to record a Notice of Default with the county. Doing so gives “constructive notice” to the entire world. The borrower has 90 days to reinstate the loan. They would stop the foreclosure process by paying all the back payments and penalties, plus the considerable costs of foreclosure up to that point.If they do not reinstate the loan, it goes into Publication. The Trustee publishes a Notice of Trustee’s Sale in a newspaper of general circulation. There are legal newspapers that exist for the sole purpose of publishing legal notices like this. They will publish the notice, which describes the time and date of the sale, for three consecutive weeks. During the Publication phase, the defaulting borrow no longer has the option of making up the back payments, penalties and fees. They must pay off the entire amount to stop the foreclosure.The Trustee’s Sale is an auction on the steps of the courthouse. People bid on the property just as they would at a sale of antiques or cars. The successful bidder must settle (pay) within 24 hours. They will receive a deed to the property and have the right to evict the former owner from the premises.A defaulting borrower can stop the sale even on the day it occurs by successfully filing a petition for bankruptcy. If they file Chapter 7, the foreclosure will only be delayed until the bankruptcy hearing between the debtor and the creditors. If they file Chapter 13, the debtor will propose a plan to the court whereby they will make payments of all their debts and back payments for the mortgage. Filing the Chapter 13 petition creates an Automatic Stay of Execution, so the sale cannot go forward. If they miss one or more payments to the Trustee or miss a mortgage payment, the lender will move for a Relief from Stay. They would then be able to reschedule the Trustee’s Sale. A debtor who was unable to make the agreed payments to the Trustee will typically have their bankruptcy plan invalidated. The bankruptcy would be dismissed, and they would no longer have the protections they had while their plan was in effect.I know this is a long answer to a short question. I should offer this disclaimer: while I do have some familiarity with the applicable real estate, foreclosure and bankruptcy laws, I am NOT a lawyer. Anyone facing these kinds of problems should consult with a lawyer in their area and get professional advice.I hope the question was hypothetical.