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California Appellate Court Resolves Matter of First Impression Regarding Reattaching Liens

Under California law, a wiped out junior lien reattaches if the trustor repurchases the real property that secured the debt. The question is, if the trustor obtains a purchase-money loan to buy the property, does the reattaching lien have priority over the purchase-money loan?

This was a matter of first impression when addressed by the court in DMC, Inc. v. Downey Sav. & Loan Assn., 99 Cal.App.4th 190 (2002). As the DMC Court explained at page 195,