Lenders and LLA

Paul Goebel · Post by **Paul Goebel** » Wed Apr 27, 2011 10:38 pm

I am working on a Lot Line Adjustment between 3 lots where a mortgage lender holds a deed of trust on one of the parcels. The City in which I am processing the LLA requires the trustee to guarantee in writing that they will change deed of trust to reflect the new legal descriptions. The lender refuses to provide this guarantee. They have been provided a preliminary copy of the LLA for their examination and take no exception to it.

I really doubt that the personnel at most of the lenders I deal with understand the LLA process. In each LLA case involving a bank, I have had similar problems. In this case our project has been delayed for many months because of of the lender. Does anyone have a successful technique for getting banks to provide the approvals needed for an LLA?

7702 · Post by **7702** » Thu Apr 28, 2011 9:19 am

Back when Washington Mutual was still in the game, you could "bank" on it taking several months for them to review the proposal and sign off on a partial release of interest for the portion of real property being granted to an adjoiner. Now that lending restrictions are even tighter, I would expect even less cooperation from those that are "too big to fail".

Paul Goebel · Post by **Paul Goebel** » Thu Apr 28, 2011 10:35 am

I agree with Mr. Wooley. The city is prudent to require the modified deed of trust. In my case, the lender won't promise to record a new deed of trust even though they seem to be agreeable to the LLA.

I don't think Land Surveyors are qualified to prepare the modified deeds of trust.

There is no partial release here. My client is gaining land with the LLA.

mpallamary · Post by **mpallamary** » Fri May 13, 2011 3:31 pm

If you do not adjust all of the deeds and all of the various interests, you are violating the subdivision map act. You, as the land surveyor in responsible charge of the map can be held liable and responsible. It is a black and white "bright line" reading of the law. Do not depend or expect the city or county's unfamiliarity with the map act be an excuse. If you want to think about the implications, think about a foreclosure and who gets what. How is the loan secured and who has a senior interest in the underlying land?

Government Code:

66424. "Subdivision" means the division, by any subdivider, of any
unit or units of improved or unimproved land, or any portion thereof,
shown on the latest equalized county assessment roll as a unit or as
contiguous units, for the purpose of sale, lease or financing,
whether immediate or future. Property shall be considered as
contiguous units, even if it is separated by roads, streets, utility
easement or railroad rights-of-way. "Subdivision" includes a
condominium project, as defined in subdivision (f) of Section 1351 of
the Civil Code, a community apartment project, as defined in
subdivision (d) of Section 1351 of the Civil Code, or the conversion
of five or more existing dwelling units to a stock cooperative, as
defined in subdivision (m) of Section 1351 of the Civil Code.

Good luck.

Paul Goebel · Post by **Paul Goebel** » Sun May 15, 2011 6:16 pm

We are getting some cooperation from the lender now. A new deed of trust is being drafted up that includes the new legal description written as part of the LLA.

mbstanton · Post by **mbstanton** » Mon May 23, 2011 7:13 pm

I've had to deal with this situation many times, and unfortunately the best remedy is to re-finance with a new lender. Have the owner approach the new lender with the idea that the loan is contingent upon their acceptance of the LLA.

So far, thats worked every time

Michael Stanton, PLS5702

Anthony Maffia · Post by **Anthony Maffia** » Mon May 23, 2011 8:29 pm

I haven't been in this situation. I've been told that a lender had to accept the LLA, and that a foreclosure would be on the adjusted parcel because deeds changed hands. No right of rescission for minor adjustments; fraud is another matter.

Ian Wilson · Post by **Ian Wilson** » Tue May 24, 2011 7:27 am

I’m not sure who told you that, Anthony, but it’s patently false. Nothing could be further from the truth.

The most bitterly contested lawsuits surrounding Lot Line Adjustments are over exactly this issue.

Think about it. How would you like to buy a brand new 4-door car only to find out when you pick it up that there is no rear seat or rear doors? That’s what it would amount to if the lender is forced to accept an LLA.

I have a number of legal citations in my files, I’ll get them out latter and post a handful for you.

Got a few fires burning this morning, but I wanted to nip this idea in the bud quickly before it spread too far.

.

Anthony Maffia · Post by **Anthony Maffia** » Tue May 24, 2011 7:58 am

Ian,

I'm not trying to spread misinformation, just trying to better understand the issues. I look forward to any further information you provide.

Thanks.

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