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Silver Trusted Contributor
NAR_SHILL
Posts: 831
Registered: ‎03-02-2011
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Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

So I purchased a home back in October.  It had been previously sold at a foreclosure auction and flipped by the purchaser. 

 

A couple of days ago,  I received a letter from the Registrar Recorder/County Clerk's office addressed to the owner who I believe lost the home, i.e. the person who was foreclosed on back in summer 2010.  I thought it was a supplemental property tax bill, as on the back of the envelope it said "Important Notice to New Property Owners regarding Payment of Property Taxes", and below that  some info about "Annual Joint Consolidated Property Tax Bill" and "Supplemental Property Tax Bill" etc.

 

Inside the envelope were two, two page sheets indicating they were "Recorded/Filed in Official Records Recorder's Office, LA County, California 06/05/12".

 

One is listed as FULL RECONVEYANCE, and the other is SUBSTITUTION OF TRUSTEE.  Both indicate the recording requested by Verdugo Trustee Service Corporation, when recorded return to current trustor, [old owner] at my address.

 

What the heck are these docs, and does this indicate any sort of challenge to my ownership/title of the property or a cloud on the title? 

Gold Regular Contributor
Andiamo53
Posts: 2,084
Registered: ‎07-12-2010
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Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

^^^
Wow, and I had just finished posting in another thread that a reconveyance to the original owner after an arms length third party purchase  was virtually impossible. I still think that's the case, especially as in your case there's been two bona fide third party purchases. Nevertheless, you have to check this out. I know nothing about how stuff gets recorded but I think people often record things without any legal basis. Therefore the first thing I would do is call the recorders office and ask them about this particular recordation. Is there an error? On what basis was it recorded? Is there a court order for reconveyance? I would also call the title company and request them to research it. If you get no answers from either of these two sources, it's time to consult an RE attorney. S/he would either challenge the recordation or sue the title company or both.

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NAR_SHILL
Posts: 831
Registered: ‎03-02-2011
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Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

Hmmm, I've been trying to figure this out, but it appears it's just  a notice that the previous owner's loan has been cleared by Citibank.  It doesn't mean that Citibank, this Verdugo Trustee Service Corp, or the previous owner has been recorded or granted anything in terms of the property. 

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Andiamo53
Posts: 2,084
Registered: ‎07-12-2010
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Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?


NAR_SHILL wrote:

Hmmm, I've been trying to figure this out, but it appears it's just  a notice that the previous owner's loan has been cleared by Citibank.  It doesn't mean that Citibank, this Verdugo Trustee Service Corp, or the previous owner has been recorded or granted anything in terms of the property. 


Well, Substitution of Trustee means nothing: That's just an early and very common step in the foreclosure process that needs to happen before the auction can take place. I don't understand the full reconveyance though. Are you saying that it could signify the reconveyance of the property back to bank prior to listing as an REO?

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NAR_SHILL
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Registered: ‎03-02-2011
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Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

Yes, however this action itself was done so years ago.  I think the bank (Citimortgage in this case) and/or LA County Recorder's office have been so backed up that they just got around to having this reconveyance officially recorded.  So basically, it's a release, by the bank, of any obligation on the previous owner from the debt/mortgage he incurred.  And since the bank most likely didn't have any sort of forwarding address for the guy, they sent it to the old address. 

 

The home was sold at a foreclosure auction in July of 2010. 

Gold Regular Contributor
Andiamo53
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Registered: ‎07-12-2010
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Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

[ Edited ]

Okay, well it looks like case closed then. However, I don't think the delay was at the Recording Office's end.  I know that my grant deed got recorded the day it was filed. I think most likely the delay occurred on the bank's end--they probably just filed the papers two years late. 

 

BTW, the delay in recording the subsitution of trustee could have provided grounds for the original owner to challenge the foreclosure. Of course if the original owner couldn't/wouldn't have paid the mortgage anyway, the bank would have eventually prevailed. 

Regular Contributor
Looky-loo
Posts: 164
Registered: ‎04-29-2011

Re: Received a letter from the Registrar Recorder/County Clerk's office, what the heck does it mean?

[ Edited ]

I don't think you have much to worry about.  A Substitution of Trustee and a Reconveyance typically happen together, and are how a deed of trust is released.  The term "Reconveyance" doesn't really have to do with actual conveyance of the property but it is a reconveyance of the lender's interest in the property with respect to its security interest (i.e., the DOT), which is technically being held in trust by the Trustee.  When you pay the loan, they "reconvey" that interest back to you.

However, when you record a deed of trust, sometimes later the original trustee can't be found, is out of business, whatever it is, and who needs or wants to go track them down?   So the beneficiary can do a Subsititution where it appoints and tells the world who is its new trustee. They can do these all day long every day if they want to (they don't). It's done because only the Trustee can sign and record the Reconveyance, so if you lose your trustee, you need to appoint the new one.  Then that new trustee files the Reconveyance removing the lien from title.    Call your title co, the recorder will have no idea what you are asking for and won't have time or care to research it.  Title is who will handle any claim if you have one.  But it's probably just part and parcel of the release of a prior deed of trust to clear your title.  If the title co gave you clean title but failed to be sure this had already been recorded, that's sort of dumb on their part, but this sounds (and of course we only have a few facts) like it's just clearing a DOT, which should be a good thing.  Unless, I suppose,  it means the prior owner actually paid off a loan they were improperly accused of not paying, and now there's evidence they did?  You may want to call title to confirm what this clears just to be sure, but I suspect you will find it's not a problem.