Foreclosure of House Lot, but Back Yard Lot Not Foreclosing

[Mylissa]

My question involves a foreclosure in the State of: California. Hello - I wanted to run this by someone who can give me confirmation that this is okay/legal. I am going into foreclosure. (company lay off and can no longer afford to pay mortgage). The house I bought is on parcel A and the backyard is on parcel B.
The backyard also runs on a different street (street parallel to my street) also and has a gate to enter as well. The lender wanted nothing to do with giving me a loan for the back lot - they just wanted to give me a loan for the front lot. So the backlot was not financed - and it is legally mine. To be on the safe side I grant deeded the back lot only to my husband (I bought the house before were were married and we have different last names). I just wanted to make sure that the lenders would not take the back lot. (I would like to sell the back lot one day down the road). This is legal correct? Also, one last question: I won't have to pay the difference for the money the bank gets for this house ...will I? If it sells for less that what my mortgage is which it will ...will they come after me for the difference?? Thank you - Mylissa

[OhMy]

My question involves a foreclosure in the State of: California. Hello - I wanted to run this by someone who can give me confirmation that this is okay/legal. I am going into foreclosure. (company lay off and can no longer afford to pay mortgage). The house I bought is on parcel A and the backyard is on parcel B.
The backyard also runs on a different street (street parallel to my street) also and has a gate to enter as well. The lender wanted nothing to do with giving me a loan for the back lot - they just wanted to give me a loan for the front lot. So the backlot was not financed - and it is legally mine. To be on the safe side I grant deeded the back lot only to my husband (I bought the house before were were married and we have different last names). I just wanted to make sure that the lenders would not take the back lot. (I would like to sell the back lot one day down the road). This is legal correct? Also, one last question: I won't have to pay the difference for the money the bank gets for this house ...will I? If it sells for less that what my mortgage is which it will ...will they come after me for the difference?? Thank you - Mylissa

Actually you may lose this to foreclosure here is why.

When the survey was done for your lender you need to check and see if the second lot was on that survey. If the meets and bounds include the second lot that was read into the lenders title policy and secured by the mortgage then you will lose the second lot as well

Just becuase the property is a seperate tax bill does not mean that it is not mortgaged.

You need to check your original mortgage and survey to see if the mortgage covered the second parcel.

If the mortgage has the meets and bounds of the second parcel then you will lose it in the foreclosure, if not then you will not lose it.

A seperate deed means nothing, The lender may not even know that they mortgaged the second lot, it all depends on that survey and how the title company picked up the meets and bounds.

If your mortgage was a purchase money mortgage, meaning you did NOT re finance this loan, it was the original loan you used to buy the house then the lender can not come after you in California for a deficiency judgment if they sell the property for less then the amount of your mortgage.

If you did a re finance or a loan modification then the lender can come after you for a deficiency judgment.

[Mylissa]

OhMy, Thank you. I am going to check into this tomorrow..and find some documents tonight to see if i can figure it out. I have called the title company though in the past...to confirm if the back lot (separate APN No.) was indeed not financed. I've called them twice to ask both times they confirmed that it was only the front lot that was financed. I did not ask about a survey or meets and bounds and I did not ask 'was the back lot mortgaged'.. so I do not know if I covered my basis. Do you think that by me asking them "is the back lot financed?" and by them telling me "no..only the front is financed" that i''m okay? Also, the grant deed i have when I bought the house had both parcel numbers on one deed. That shouldn't matter...should it? I deeded the back lot (though it might not work out afterall) by using the APN of the back lot only. Is this okay?

[OhMy]

OhMy, Thank you. I am going to check into this tomorrow..and find some documents tonight to see if i can figure it out. I have called the title company though in the past...to confirm if the back lot (separate APN No.) was indeed not financed. I've called them twice to ask both times they confirmed that it was only the front lot that was financed. I did not ask about a survey or meets and bounds and I did not ask 'was the back lot mortgaged'.. so I do not know if I covered my basis. Do you think that by me asking them "is the back lot financed?" and by them telling me "no..only the front is financed" that i''m okay? Also, the grant deed i have when I bought the house had both parcel numbers on one deed. That shouldn't matter...should it? I deeded the back lot (though it might not work out afterall) by using the APN of the back lot only. Is this okay?

Once you locate the survey that was used for this mortgage, look at the survey and see if you the second lot is on the survey. I really would not trust a clerk at the title company.

Again, just because there is a seperate APN no. that does not mean anything.

This will come down to one fact;

What is showing on the mortgage survey.

If the deed has BOTH parcels on the same deed there is a very good chance then that the mortgage covers both parcels. If this mortgage was used for this purchase then it most probably covers all the MEETS AND BOUNDS on the deed.

The survey is read into the title policy and the DEED to you is covered by the mortgage recorded with the deed at the original closing.

Post back once you find your original closing papers.

[Mylissa]

I really need to know so I found, attached to the lenders papers, Schedules A and B which at the bottom have "First American Title" (top has ALTA Loan Policy Form) and i'm not sure if this is the right document but I do see on this document, paragraph 4, of both Schedule A and B (a 1st and 2nd) " Affects Lot 35 Only" - that is the lot the house is on. I'm still looking... oh no.. i found attached to this page ..a map. The map does have many lots and they do include both lots - but the prior pages state - typed "applies to lot 35 only.' I'm worried. Please reply again. Thank you

[OhMy]

I really need to know so I found, attached to the lenders papers, Schedules A and B which at the bottom have "First American Title" (top has ALTA Loan Policy Form) and i'm not sure if this is the right document but I do see on this document, paragraph 4, of both Schedule A and B (a 1st and 2nd) " Affects Lot 35 Only" - that is the lot the house is on. I'm still looking... oh no.. i found attached to this page ..a map. The map does have many lots and they do include both lots - but the prior pages state - typed "applies to lot 35 only.' I'm worried. Please reply again. Thank you

The "meets and bounds" are written like this;

Starting at the nw corner of XYZ street, then running 252' 3" westbound to point ABC, then running 121' 2" northboud etc.

In your title policy you will have something very much like I just listed above. It is formulated from the actual survey. Again, the lot #'s are not meets and bounds

Lots can be split over time, combined, half a lot sold, so the meets and bounds are the actual property description

[Mylissa]

thank you ...i appreciate it very much. I cannot find the description - the meets and bounds. I'm going to have to call the title company tomorrow morning. I'm ready for the worst case scenario and appreciate being told what can happen..or has happened. Thank you, Mylissa

[Mylissa]

Hello again. I called the title company and spoke to a manager and no survey was done and she didn't know about the meets and bounds. I have read the title policy and it does not have as you described above. It has the 2 loans (the 1st and 2nd) and under each it has the description of the property which does describe both parcels but under each description it states "refers to lot 35 only." The title company said that the only lot recorded at the time of the closing was lot 35 and she confirmed that only the first lot was mortgaged. Can the back lot be taken any way even if it was not mortgaged? Thank you, Mylissa

[OhMy]

Hello again. I called the title company and spoke to a manager and no survey was done and she didn't know about the meets and bounds. I have read the title policy and it does not have as you described above. It has the 2 loans (the 1st and 2nd) and under each it has the description of the property which does describe both parcels but under each description it states "refers to lot 35 only." The title company said that the only lot recorded at the time of the closing was lot 35 and she confirmed that only the first lot was mortgaged. Can the back lot be taken any way even if it was not mortgaged? Thank you, Mylissa

The other lot in question is on a seperate deed? and purchased at another time?

Then you should be safe since the title company confirmed that the second lot is not covered by the mortgage.

If you have the lot number of the second lot (the lot in question) you can go down to the county recorders office, look up the deed and any mortgage recorded with it. It is a simple process. Just to be sure.

In your foreclosure summons on the LOT 35, that too will list the LOT NUMBERS being foreclosed. You can see if the second lot number is listed there as well.

There has to be a meets and bounds. This is why I am concerned about the title company giving you information. (I am not sure how experienced this person is)

Check the foreclosure summons and the county recorders office just to be safe then you will know for sure.

[Mylissa]

I bought the house and the lot at the same time. I was given one deed with both lots on it. When the lender discovered that there were two lots, he made it clear that the financing was only for the lot the house was on because i could sell the back lot - which doesn't make sense because how could I have sold the back lot if it were financed(?). I am going to check the county recorders office on Monday to confirm the lot was not recorded and mortgaged. Just wondering...is there anything I can do ahead of time to protect the back lot...just to be on safe side? Anything? Or is this out of my hands at this point? Also, could you please tell me how many points my credit score will go down because of the foreclosure which will happen in the future? I also have been paying all my other debt of course like credit cards.. which of course I should but a few people have told me - and which I thought was bad advice...but they told me it doesn't due any good to pay off all my other bills 'since my credit will be shot.' Even if it were shot I have to pay what I know I can, and should pay. Thank you kindly, Mylissa