What happens if a mortgage is not recorded?
If the borrower on a recorded mortgage defaults, the lender can foreclose and either be paid in full or receive the property.
However, if a mortgage or deed of trust was not recorded, the lender cannot foreclose against the property, just against the defaulting borrower personally..
Is an unrecorded mortgage enforceable?
Typically, state law provides that an unrecorded mortgage is enforceable between the mortgagor and mortgagee, but a bona fide purchaser without notice will be able to acquire the mortgaged property free and clear the mortgage. … Thus, under the facts of this case normally the trustee would be able to avoid the mortgage.
Are unrecorded deeds valid?
In a few states, an unrecorded deed is invalid unless it is recorded. But in most states, an unrecorded deed is valid only between the grantor and the grantee. When a deed is unrecorded, it does not give “constructive notice” to the world of its contents.
What is an unrecorded trust?
In circumstances where a trust is unrecorded, the only evidence of the existence of the trust may be a recorded Certificate of Trust, which is acceptable. … Without clear evidence identifying a successor trustee, anyone could claim to be a trustee and attempt to convey the trust property.
Who holds the deed when you have a mortgage?
While you have a mortgage, the lender has rights to the property title until the loan is paid. If you buy a home without a mortgage, the real estate attorney or title company records the deed and issues a copy to you.
Who holds the deed when there is a mortgage?
The two parties involved in a mortgage deed state are the buyer and the lender. The lender holds the deed for the duration of the loan.