Legal Description Does Not Match Deed

Foreclosure Investing
1

I have recently come across a property in foreclosure with a legal description in the deed of trust that is different from the legal description in the grant deed and APN. The legal description in the deed of trust refers to the APN as ?Portion?. The legal description in the grant deed refers to four lots that were mapped in 1914. This legal description has been the same for this property for many years and matches the assessor?s map and APN.

There are two houses on the property with two addresses. Without a survey it is difficult to say for sure, but it appears that each house is on two lots.

If the bank forecloses, I assume that the security will be the portion of the APN that is described in the attached legal description. And the TDUS would therefore include the same legal description that is in the deed of trust.

Being curious, I went to the county and asked them what they would do with a TDUS with a legal description that did was different than the current APN and tax parcel. The assessor?s office said they would remap and issue a new APN to match the legal description.

This seemed way to simple to me, so I went to the planning department and asked them if they would have any requirements. And they told me, NO WAY !! Would be a ?sub-division through grant deed? and would be Violation of the Subdivision Map Act.

Would the result of this make the property in the legal description unmarketable?

I have actually seen more than one property with this arrangement. I would assume if I have seen two, then there are more. I would guess that the reason they encumbered only a portion of the legal APN was to get more money. This same property has another deed of trust on the other half, or two remaining lots and house.

So, is this something to steer clear of? Our planning department is often wrong.

2

This sounds like a mess. You might want to talk to the title company that you would be using to insure your sale transaction. It could be a case where the legal description in the Trust Deed is erroneous. Somewhere along the line a title company was involved in the Trust Deed refinance or purchase transaction that created the original document with the legal description. Try contacting that title company (promise your business for the sale transaction) and figure out what happened during that transaction.

3

I decided to pass on this one and it in fact did go to sale and went back to the bank. Your suggestion is good and I have run this past them, they seemed pretty clueless about it also. In this case, I don’t think it was a mistake. I think the borrower may have decided he could get more money if he got a loan on the two separate houses. No one thought through what would happen in a foreclosure. Seems that everyone lost sight of the value of the underlying security of the property and made the loan anyway.