3rd party aquired title on unsecured Note
My mom(trustee for the Trust B) loaned my brother $65000 to buy a mobile home in 2003. He signed a Note making payments to my mom’s personal acct thinking that she would make payments to Trust B(lien holder). The note is not secured. The note is not assumable by a 3rd party.
We found out that the beneficiaries of the Trust B are not aware of the note. In 2006 my mom got a loan w/ private lender, using her own home as collateral AND 100% interest in my brother’s Note.
My mother had given this person a copy of my his Note with two CHANGES. His note now reads that he is to pay Trust F, payable to my mother and his signature was forged.
My mom transferred the title to my brother’s home to the private lender as lien holder. In HER loan papers my brother’s home and address are listed as collateral .The private lender claims her loan to my mom is “in good faith” and she is entitled go after my brother for payments on his note. Does the private lender have the legal authority to be on my brother’s title and to collect payments on his note?
Is assigning 100% interest his Note to a 3rd party legal when his note is not assumable nor lists collateral? Three years later can his home be used as collateral in another persons note?
Re: 3rd party aquired title on unsecured Note
There are multiple issues here. Sounds like the mom is guilty of a breach of fiduciary duty by mis-handling trust funds. The whole story about the promissory note depends entirely upon whether it is NEGOTIABLE, not whether it is assumable. There are entirely different concepts. So, the holder in due course of the note may or may not have the right to demand payment to herself. Next, whether the note is collateralized or not is another issue; perhaps the note does not constitute a lien on the mobile home, but on the other hand, it might – the collateral follows the obligation, so if there is collateral at all, the holder in due course would also have the right to proceed against the collateral, if there were any. Finally, the forgeries, if proven, would probably void the effects, benefits, etc. obtained by the forger or those acting in concert with her, although the original document, as written before the forged alterations, should remain in effect.
Bryan Whipple
Bryan R. R. Whipple, Attorney at Law
P O Box 318
Tomales, CA 94971-0318
Re: 3rd party aquired title on unsecured Note
Answered
Mitchell Roth
MW Roth, Professional Law Corporation
13245 Riverside Dr. Suite 320
Sherman Oaks, CA 91423