Private Lenders: Your “Borrower” Might Not Be Who You Think
They didn’t sign your note—but they can still stall your foreclosure.
If you're a private money lender foreclosing on a junior lien secured by residential property—even on a business purpose loan—California’s new Civil Code § 2924.13 now applies to you.
And it uses a much broader definition of “borrower” than what you’re used to under Civil Code § 2920.5.
For years, the term “borrower” in foreclosure laws was limited. Under § 2920.5, it meant a natural person—someone potentially eligible for a loan mod. It specifically excluded LLCs, corporations, bankruptcy filers, and others.
But § 2924.13 adopts the definition from § 2929.5, which says a borrower includes:
The trustor or mortgagor, and
Any successor in interest to the real property before the lien is foreclosed, reconveyed, or discharged
In plain English? The “borrower” isn’t just the person who signed your note. It could be their heir, their business partner, someone who inherited the property, or even a third party who acquired title subject to your lien.
That’s a massive shift in who might now have standing to challenge your foreclosure.
And here’s the kicker: “Successor in interest” isn’t defined. Courts may interpret it broadly—especially in favor of borrowers.
Bottom line: This expanded definition applies to all loan types—including business purpose. That means more people may have a say in your foreclosure. Review your files, confirm who owns the property, and stay vigilant.
Follow for more as we break this down step by step.