A California borrower pays off their deed of trust, but the trustee fails to record a reconveyance within the required timeframe. Under California law, what penalty does the trustee face?
Correct Answer
A) The trustee may be liable for a $500 statutory forfeiture plus the trustor's actual damages
Civil Code §2941 runs the payoff sequence on a schedule: within 30 days of full satisfaction the beneficiary must deliver a request for full reconveyance to the trustee, and the trustee must then execute and record the full reconveyance within 21 days of receiving it. Section 2941(d) makes a violator liable to the person affected for all damages sustained by reason of the violation, and requires the violator to forfeit $500 to that person. The remedy is two-part, so a trustee who records late cannot escape the forfeiture by pointing to the absence of proven damages.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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