The 2021 Autumn Equinox has come and gone. For those of you who did not realize, it was on Sep 22, 2021. Its significance is that on that day, daytime and nighttime were equal. In other words, the days are all downhill after that. Get ready for the FALL. Right. I meant the noun and not the verb.
So here are two questions I would like to chat about this month. Both have been chosen for their EDUCATIONAL MOMENTS!
YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
Question – Good morning I am writing to you about a bank that did not file a reconveyance deed.
My loan was a 2nd and it was a line of credit for $86,000.00 opened on Dec..18, 2001. I defaulted on this loan and the loan got sold to another bank. This second bank wanted to take back our property in foreclosure and sell it but we settled with them and negotiated a weekly installment payment for an amount we could afford. After a couple of months, we negotiated again and came to terms about how much money was owing, which was roughly $20,000. I sent a check by mail to pay this credit line off and the lender sent me paperwork which was a deed saying the loan was paid off.
Through the years we also paid off our 1st loan and as we don’t owe anything on the house we decided to apply for a new line of credit. When the lender reviewed our property they said that there was still a loan on the property, which was that original revolving credit line loan. I contacted the second bank who purchased the loan from the first and now they say I owe $56,000.00 on that loan even though I paid off the balance they said was owing about $20,000. It’s been about 11 years and I can’t find my deed saying it was paid off.
What can I do?
Answer – Thank you for contacting us. I am not sure if the paperwork that the person sent you after you paid $20,000 was the reconveyance deed that had to be recorded at the county recorder’s office to show the loan was paid in full. But you say you can’t find the document. That is unfortunate.
Unfortunately, I really don’t have any answers for you. All I can say is that you need to find as much background information as you can of the payment arrangement you first made with the loan officer. Are you certain that $20,000 is the balance that they were willing to take to mark the loan “paid in full”? Or was that just a payment to make up for past due payments? Was there anything in writing that you have kept?
I am surprised that this second bank did not foreclose on your property if you did not pay them for 11 years and now owe $56,000. They should have contacted you to restart payments or started foreclosure proceedings years ago.
My suggestion is to keep talking and negotiating with that second Bank. It is also important that you look for all proof and records of your payments, communications, anything to do with that loan. Without proof it will be very hard to prove to them that you were assured the loan was paid in full.
I am sorry we are not able to give you further help.
Educational Moment: When a loan is paid off, an institutional lender must issue the reconveyance that will remove the loan from the property. When the loan is paid through an escrow transaction, the escrow and title companies will take responsibility for getting the proper documents. When it is a direct payoff from Borrower, then the Borrower becomes directly responsible for all these documents. Not all lenders will actually record this reconveyance. Sometimes they will give the original document to the Borrower and ask them to record it. So these are my tips for anyone who encounters a situation when they are making their payoff directly without an escrow:
- Ask the lender for the reconveyance form
- Make sure the lender is going to record it. If they are not, make sure you get the original so that you can record it.
- Do not throw away or put aside any documents that come in from the lender. Some of these could be proof of payment and should be acted on immediately.
- Always keep good records for yourself. This includes copies of communications, paperwork and checks used to make the payment
Finally, if this is a private lender, then the above becomes even more important. Private lenders may move or pass away. If you don’t get the proper documents at the moment of payoff, who knows when you will get it in the future!
Question – I am inquiring on behalf of my mom, as we were recommended to contact a title or escrow company. My parents have two parcels in California, and they are listed as joint tenants. Unfortunately, my dad passed away last year, and we have been advised to complete an affidavit. Additionally, my mom’s name is incorrect in the original deeds. It was mentioned a new deed would need to be completed to correct my mom’s name.
Answer – The advice is correct. For your father’s passing, you will need an Affidavit of Death of Joint Tenant, and an original certified copy of your father’s Death Certificate to attach to it. To change your mother’s name, after she does the Affidavit of Death, she will need to sign a Deed from herself to herself, reflecting her correct name.
As escrow companies have stringent requirements regarding the preparation of documents that are not part of an actual escrow, we recommend document preparation companies who can provide this document drawing service.
Educational Moment – This was a pretty common question but it provides for a good educational moment. The passing of a person is a sad thing and leaves everyone in turmoil for a while. But life does go on and certain things have to happen to reflect the death. For those who handle the estate and property ownership, please remember that an Affidavit of Death should be recorded. In addition, within 150 days from death, notification should be given to the County Assessor’s office. Failure to notify will incur penalties. The Assessor has the right to reassess the property taxes upon the death of an owner, no matter if it is an individual or a Trustee of a Trust. The LA County Assessor has a great website and addresses this issue at this link: https://assessor.lacounty.gov/homeowners/death-of-an-owner
Do you have other questions I can answer for you? Please feel free to email me at info @ vivaescrow . com
~ Funny of the Month~
A tale of two brains –
Female brain and Male brain
~ Quote of the month ~
Don’t worry about avoiding temptation. As you grow older, it will avoid you.
My YouTube offering for the month:
How does a forbearance affect the Escrow Officer? Why does it make us nervous? In fact, what is a forbearance? Sure, forbearance has slowed down, but it is a topic that would not have appeared in a storyline if it weren’t for the pandemic.
You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
“Escrow is my FOREMOST language!”
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com