What to do when lender does not record trust deed after refinance?
Alex - California asked:
I know someone that refinanced their home and the new trust deed was not recorded against the subject property so that in effect there is no lien encumbered by the new refinance (there’s no loans showing against the home) even though they do receive monthly statements in order to make monthly payments to the lender. What is this person’s solution or recourse or options? I would love a paralegal or real estate attorney to give me feedback.
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I know someone that refinanced their home and the new trust deed was not recorded against the subject property so that in effect there is no lien encumbered by the new refinance (there’s no loans showing against the home) even though they do receive monthly statements in order to make monthly payments to the lender. What is this person’s solution or recourse or options? I would love a paralegal or real estate attorney to give me feedback.
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February 7th, 2009 at 3:10 pm
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The recording of the deed is handled by either the escrow company who initiates it with the title company or, in some states an attorney acts as an escrow agent and is responsible for seeing this through to conclusion. This can still be recorded with no harm done as long as nothing else has encumbered the property since.
Here is some additional info. Hope this helps.
February 9th, 2009 at 2:11 pm
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Just because the lien is not recorded in the courthouse doesn’t mean that it isn’t enforceable. They have signed the papers using the property as collateral. They are still responsible for paying the loan. The solution: Contact the lender about the mishap and have it recorded. It was most likely an oversight by the lender or the title company.
A lien just like a deed can be recorded at any time and still be enforceable. So for example: if they quit making payments, the lender could record the lien and then begin foreclosure proceedings.
Hope this helps!
February 10th, 2009 at 5:03 pm
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A mortgage loan consists of two primary documents, the promissory note for the amount of the loan and the trust deed that secures that debt against the property. Even though the deed may not have been recorded the note is a valid debt.
The recording oversight occurs occasionally. An honorable person would call the lender and advise them that the deed was not recorded, give them the name and telephone of the party who was responsible for that function, and then follow up to ensure that the recording was completed.