Legal Question in Real Estate Law in California
Paid off loan, never got reconveyance, lender bankrupt
I have documentation showing my parents paid off a loan (secured by their home) back in 1986. An escrow company handled the transaction, but they are now out of business.
Despite receiving payment, the lender never sent my parents a reconveyance, and the company is now bankrupt. The deed is still showing up on my parents home.
The beneficiary on the deed of trust (the lender whose company went bankrupt) was contacted recently. I provided him with written documentation of the payoff, but he refused (on advice from his attorney) to provide me a reconveyance as the company is now bankrupt.
I am trying to avoid thousands and thousands of dollars in legal bills, and try and understand what steps I can take. Rather than getting a bond, I would live to get this deed reconveyed.
Can I petition the Orange County, California bankruptcy court?
Must I hire an attorney? What kind of time is required to get this done?
Any suggestions on what I should do would be greatly appreciated.
Thank you!
3 Answers from Attorneys
Re: Paid off loan, never got reconveyance, lender bankrupt
Every deed of trust has a listed "trustee" and it is often a title company, but need not be. Examine your parents' deed and find out who the trustee is, NOT the beneficiary. The trustee is the one who should prepare the reconveyance and has the authority to do it; take the proof of payment to them.
Re: Paid off loan, never got reconveyance, lender bankrupt
I agree with J. Deming's comments. I would only add that if the lender is presently in bankruptcy, the Court's approval may be necessary. I would go to the trustee (from the Deed) first and demand that it be reconveyed. If they provide you with a reconveyance, then no need to worry about the Bankruptcy Court. If, however, they are as conservative as most trustees are, they will contact the lender, the lender will advise that they are in bankruptcy, and the trustee might require Bankruptcy Court approval.
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Re: Paid off loan, never got reconveyance, lender bankrupt
Answered.
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