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Information on Dismissal and Deed in Lieu of Foreclosure

Mark Cappel
UpdatedJul 23, 2008

Is a "dismissal" different than a deed-in-lieu-of"?

I had been going through the Deed-in-lieu-of process with my mortgage company, which I started in 2007. I thought that it had been resolved in February 2008, when they sent me a final notice of dismissal. But my name (7 months later is still listed as the Property Owner). Is a "dismissal" different than a deed-in-lieu-of"? Apparently, nothing has been recorded in the Courts to get my name off the record. The mortgage company does not answer my calls and I can get no information whatsoever from them. I haven't received any communication from them since this dismissal back in february. What should I do?

To answer your question simply, a "dismissal" of a foreclosure proceeding is quite different from a "deed in lieu of foreclosure" agreement. A deed in lieu of foreclosure is an agreement in which a homeowner voluntarily transfers the deed to his home to the lender voluntarily in order to prevent further foreclosure proceedings.

Generally speaking, a mortgage lender who has filed a foreclosure action against a borrower will file a dismissal with the court to stop the foreclosure proceedings if a deed in lieu of foreclosure agreement is signed by the homeowner, as court intervention is usually no longer required. From the information in your question, it sounds like you reached a deed in lieu of foreclosure agreement with your lender, and that your lender filed a motion with the court to dismiss the case. However, it sounds as if your lender has not taken the final step in documenting the transfer of the property by filing a copy of the agreement transferring title with your county recorder's office. The fact that the lender has not filed the appropriate documents with the county recorder's office should not change the fact that you have entered into a deed in lieu of foreclosure agreement with your lender and that the deed is now held by the lender.

The information available in the county recorder's office is primarily for the benefit and protection of potential buyers, lenders, and other interested third parties, to help them determine who legally owns a property and what encumbrances (i.e., mortgages, equity loans, tax liens, judgment liens, etc.) have been placed on the property. However, the information in the recorder's books is not a definitive statement of who legally owns a property, as there can be a significant delay between the time that a property is transferred and the time that the transfer is recorded with the county recorder. In your case, the deed in lieu of foreclosure agreement you signed with your mortgage company means that the lender owns the property, regardless of what the county recorder's office may say. I have seen several cases in which lenders have failed to notify the recorder of the transfer after a deed in lieu of foreclosure agreement. You have no obligation to update the ownership information with the recorder's office; once you signed the deed in lieu agreement, your responsibilities regarding the reporting of ownership ended. The fact that the home is still listed in your name at the recorderÂ’s office should not cause you any significant problems, so my advice would be to not concern yourself over the property status reflected by the county recorderÂ’s office. Unless you encounter some specific situation in which the information if somehow causing you problems, you should have little reason to worry about this issue.

If you would like to read more about foreclosure and options available to consumers, I encourage you to visit the Foreclosure Advice page. I wish you the best of luck in resolving this issue, and hope that the information I have provided helps you Find. Learn. Save.