CA loan legality question

Just wondering, would I be forbidden by CA law to provide a hard money loan or a private loan to a homeowner who is currently trying to payoff a 2nd loan on their home?

2nd is about to ask court access to sell home and has priority over 1st.


I love it when new investors don't get the answer they want and figure "If I ask the question a different way will I get the answer I want"?

You can make an offer on anything you want to, no laws against it however since the property owner (Not Note Holder) filed bankruptcy then the note holder will need to ask the court permission to sell their note!

The thing I think your missing is that you go, get permission, buy the note and 4 months from now the judge requests a court appointed trustee to negotiate the notes and sell the property, so here you are with your bright shiny trust deed note and the trustee sets up a “Arms Length Sale for a retail price” and here you are court ordered to sell and when all is said and done you are negative $150 dollars.

You have zero control and this property could be in bankruptcy court for 6, 8, 10 or 12 months or longer depending on how many assets have to be liquidated in order to find and capture as much money for creditors as possible.

You will not get that equity, no way no how!!! It is not legal for the bankrupt parties attorney to not divulge the fact the property has equity to the court and the judge can not ignore the fact there is money available in this property for creditors.

It can not be sold to you with $100k in equity, you could buy it for $400k providing you stay outside the court proceedings and are truly an “Arms Length Transaction”!

The judge has a copy of this guys credit report, he will know what’s owed the minute he sits down to the bench and he will order an appraisal or brokers price opinion if it comes to that to understand the value. The judge can not as I said in the other section sell or allow either trust deed holder to take the property if it has equity in it.

Now I have seen a judge give a property over to the note holder that is say mortgaged for $300k and valued if lucky at $320k which is about realtor fees and closing costs but I guarantee no one manipulated the court or tried to pull a fast one under the judges nose!

Go to the next property!!!