Henry is selling his home in Marin County, California. The buyer's title company issues a preliminary title report showing an old deed of trust that Henry already paid off seven years ago. Henry contacts his former lender, but the company has gone out of business. How can Henry clear this title defect in California?
Correct Answer
D) Record a substitution of trustee and full reconveyance deed, using the procedures under California Civil Code §2941 for defunct lenders
California Civil Code §2941 provides specific procedures for obtaining a reconveyance when the original lender is no longer in business. The borrower can petition a title company to act as a substituted trustee and record a full reconveyance, provided there is evidence the debt was fully satisfied. This is a common procedure for clearing old, satisfied deeds of trust from defunct lenders.
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A California preliminary title report is issued in connection with a residential sale. Which of the following items would MOST likely appear as a standard exception in that report?
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A California court enters a quiet title judgment declaring that Smith is the rightful owner of a disputed parcel. Smith then sells the property to Jones via grant deed, and Jones obtains an ALTA extended title insurance policy. Subsequently, a third party produces a deed predating Smith's chain of title, claiming that the quiet title action had a jurisdictional defect because proper service was not made. Under California law, which of the following BEST describes Jones's position?