Payoff demand during escrow

3 Replies

There are multiple deed of trusts recorded on a CA property that is now under escrow. If the contract price cannot cover all the payoff demand, can the seller still close the escrow? What would happen in this kind of situation? Can you give me some suggestion?

Sounds like it's going to turn into a short sale. Hope you weren't hanging your hat on this deal closing in a timely manner, or at all. The seller isn't qualified to sell.

@Chris Mason Thank you for the response. I am actually one of the deed of trust holder. Does it mean the seller will not be able to close the escrow if he cannot satisfy all the payoff demand? In terms of getting paid? Does everyone who hold deed of trust have the same priority of getting paid for the loan? Does it matter if my payoff demand is higher or lower? It is not a foreclosure sale. It is a normal transaction. 

Originally posted by @Wai Wah Chan:

@Chris Mason Thank you for the response. I am actually one of the deed of trust holder. Does it mean the seller will not be able to close the escrow if he cannot satisfy all the payoff demand? In terms of getting paid? Does everyone who hold deed of trust have the same priority of getting paid for the loan? Does it matter if my payoff demand is higher or lower? It is not a foreclosure sale. It is a normal transaction. 

Assuming a buyer that wants title insurance, or that is using a traditional mortgage, the seller cannot sell without you signing off on not getting paid what is owed to you.

In the event of foreclosure, deeds of trust are prioritized in the order in which they were recorded. So if they have a traditional mortgage they got when they bought it, then they got a HELOC, then the IRS recorded a lien for unpaid taxes, then you lent them money... you would be 4th priority.

(I am not a lawyer talk to a lawyer etc)