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Reconveyance Deed & why it might be important to make sure it happened!!!

Reconveyance Deed & why it might be important to make sure it happened!!!woman standing there pointing to a deed


I should explain what a reconveyance deed is to help make some more sense of this.  Anytime there is a loan on a property (at least in California), there is a deed recorded on the property.  Then when a loan is paid off against a property, another deed gets filed (reconveyance deed).  That type of deed shows that that lender no longer has interest in the property.
 
In my real estate world, I normally don't watch for that type of activity.  It's a behind the scenes thing that gets done after we close escrow, which makes sense because I am making sure my seller gets their home sold or that my buyer gets in the property they purchased. 

The loan against a property is what the title company handles, they send money (full payoff or agreed short payoff in a short sale) to those lenders & then either that lender will file a reconveyance deed with their own "prefered" title connection (which will then end up at the county) or they will send that reconveyance deed to the title company that closed the escrow & have them file it thru the county.  Either way, I don't follow up with these lenders to make sure they did their reconveyance deed. 

It seems like realtors might want to start doing that or maybe at least following up with the title company to make sure it's done.  It sure can cause a lot of issues down the road if it wasn't done properly.
 
I recently had a buyer (15 months ago) purchase a short sale in Tracy CA & the bank forgot to do their "reconveyance deed".  Not sure how you forget, but I guess there are humans at Chase Bank that didn't get it done.  About 6 months ago, my buyers started getting foreclosure notices addressed to the prior owner.  Of course she didn't live there & my client kept sending the mail back as "return to sender". 

Mr & Mrs Buyer got concerned a month ago because Fed Ex packages started being dropped off on their door step in Tracy.  A process server came to their door & wanted to speak to the old owner.  Now that's when it got serious.  Thankfully my buyer went to the local Chase bank, title company, county recorder's office & started pokeing around to get to the bottom of it.  They received an "investigation" fax number to Chase to send their documentation to show they owned it & to leave them alone.  

It must have worked because a week after they faxed to this "investigation" number, a RECONVEYANCE DEED was miraculously filed with the county recorder's office & the phone calls have stopped.  Now I think I should probably follow up on all my closed escrows to make sure this happens to alleviate any of my future buyers dealing with this sort of shenanigans. 

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Comment by Elena G Adgate on April 1, 2011 at 3:09pm

I would like to know how  some agents whose office is more that 50 miles from the bank owned properties get the listings and I'm within 5 miles, 23 years experience in selling real estate, plus broker owner, full time don't t get the listings.

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