Pereira

Introduction:

This case raises the narrow question of whether a lender may enforce a due-on-sale clause contained in the provisions of a deed of trust (executed in 1979), when the party who purchases the real property from the trustor refused to provide the lender with credit information. We affirm the trial court’s judgment that in such circumstances the lender may accelerate the obligation due under the loan.

Background:

The facts are not in dispute. On August 30, 1979, Joseph and Kay Orlando (hereafter trustors) executed a promissory note for $105,000 in favor of Santa Clara Savings and Loan Association (hereafter lender or Santa Clara Savings), and a first deed of trust as security. The subject property is residential, and was occupied by the Orlandos at the time the note and deed were signed. The transaction between the Orlandos and lender was for the purpose of refinancing the Orlandos’ home.

On December 12, 1979, the Orlandos conveyed the property to appellants Victor and Carolina Pereira and Maria Braga (hereafter buyers, or Pereira, et al.). The selling price was $168,500 and the buyers paid a cash down payment of $63,488.67, almost 40 percent of the price.…