Temple-Inland Faces Reconveyance Lawsuit in CA
Superior Court Judge Stephen Sundvold recently certified a class against Temple-Inland Mortgage Corp. of Austin, Texas, allowing claims to go forward against the company, which allege Temple-Inland failed to timely reconvey home loans.
The class representative in Soriano v. Temple-Inland Mortgage Corp. is a former customer who claims the company did not properly reconvey their title after the loan was refinanced. Under California law, lenders are required "to timely reconvey title to homeowners' properties when loans are refinanced or otherwise paid in full." The class members have similar claims against Temple-Inland.
Finally, after years of delay tactics by Temple-Inland, the citizens of California will have this case decided on the merits of a trial, said Los Angeles attorney Robert Brava-Partain of Baum Hedlund, who argued the class certification motion and said that tens of thousands of homeowners across California have been affected by Temple-Inland's illegal actions.
A reconveyance is the transferring of a title back to its previous owner. If a reconveyance is not done properly or on time, it can leave a "cloud" on the title, thus holding it up in escrow. This is usually discovered when the sale of the home is days from being final. In most cases, the buyer has loan approval, and they keys are about to be given to the new buyer when the seller is told there is a "cloud" on the title which must be cleared before the sale can go through. Escrow cannot close until the lien is cleared. But the seller paid the debt years ago, he said.
To clear a paid loan that is secured by real estate, and to ensure it is cleared as "paid off" in public records, the lender must turn over the original note and trust deed to the borrower or the trustee for "reconveyance" and filing with the county recorder. The reconveyance lets everyone know the borrower satisfied the debt.
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