In commercial real estate, deeds of trust are used as security instruments to protect both lenders and borrowers. Once a borrower pays off their loan, lenders are obligated to remove the deed from public records and return ownership to the borrower. Because the deed is so often crucially important to the borrower, failure to do this in a timely manner can result in penalties and fees for the lender. This is accomplished by carrying out the reconveyance process.
The team at Total Lender Solutions helps lenders manage their assets by assisting in foreclosure, UCC sales, and reconveyances. We know that the first step to completing a reconveyance is to understand your responsibility as a lender. Read below to learn more about the reconveyance process for commercial lenders.
What is the Reconveyance Process for Commercial Lenders?
A deed of reconveyance transfers the title of a property from the trustee named in the deed of trust back to the borrower or property owner. The trustee can be an independent party, usually an attorney or loan servicer. The lender is responsible for contacting the trustee and directs the trustee to execute and deliver the deed of reconveyance to the trustor once the loan has been fully paid off.
While borrowers own the title the moment they pay off the loan, lenders should understand the significance of providing borrowers with a deed of reconveyance after the loan payoff. Without the deed of reconveyance, the lien can sometimes remain on record and will be revealed in title reports or preliminary title searches, potentially causing issues for future transactions involving the property. Lenders may face statutory penalties imposed by the state for their failure to provide a reconveyance deed in a timely manner. Moreover, borrowers might pursue legal action against lenders if their failure to deliver the deed leads to hardships, whether financial or otherwise.
How Total Lender Solutions Can Help?
Total Lender Solutions specializes in assisting lenders with their reconveyance processing needs. By outsourcing this important task to experienced professionals, lenders can ensure that reconveyances are drafted, sent to title holders and county officials, and recorded in a timely manner.
Total Lender Solutions has been a trusted partner for lenders seeking to maximize recoveries on defaulted loans for over 15 years. By collaborating closely with our clients, Total Lender Solutions acts as a dedicated extension of your team, offering comprehensive solutions and seamless communication throughout the foreclosure process.
