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Who is the Owner of Record?
by CHARLENE PERRY | 2012/09/25 |

This is one of the questions that has been coming up more and more lately in my office, and frankly, I am not real sure how to answer it.


Many of us are seeing more and more transactions of late where the Note Holder has agreed to accept a Deed in Lieu of Foreclosure.  As is often the case many lenders (Note Holders) are marketing and selling  the property through an Asset Management Company in advance of the recording of the actual Deed in Lieu of Foreclosure.   In many instances the actual Deed in Lieu is recorded simultaneously with the Warranty Deed from Note Holder to contract purchaser. 

BUT.. the Note Holder insists that the Contract of Sale identify the "Seller" as 'the owner of record'.  Hmm...So, then in the event the Deed in Lieu has not been recorded at the time of contract acceptance who is the 'owner of record'?  If you read the signature line of the 50+ page contract of sale you will find  the seller's signature to read something along the lines of ABC ASSET MANAGEMENT CO., on behalf of XYZ BANK.   You will generally find a separate addendum to contract similar to an REO Asset Addendum which again is signed by ABC on behalf of XYZ.  BUT, you will NEVER see a contract of sale in these cases signed by the ACTUAL "Owner of Record"

Many of the transactions that have crossed my desk lately have been Deed in Lieu transactions and in some instances the contract purchaser is taking a new purchase money mortgage to acquire the property. I have recently had several situations where the buyer's lender has requested an addendum to contract naming the actual "owner of record", but who do we name? The REO Asset Management Company; the Record Owner; or the Note Holder?   When it all shakes out and we go to record there will be at least 2 deeds; one, a Deed in Lieu  from the Record Owner to the Note Holder and then another from Note Holder to contract purchaser. 

Of course our Title Commitment reveals the name of the record owner as well as the fact that we are going to be recording a series of deeds.  

I am probably over thinking this, as I often do, but I would appreciate your thoughts about this.  So far, we have usually been required to name the Note Holder in the Addendum in order to satisfy the lender's requirements.


545 words | 7250 views | 4 comments | log in or register to post a comment

That's a good question

it's almost impossible to answer this question without seeing  the 50 page agreement.  The lender's title is subject to the homeowner's dil and I don't know how the lender can be the seller in the contract when what the lender has is only an expectation of a title to sell.  But, then again, I think the lender could possibly sell a contractual future interest if in fact the homeowner has made a written commitment.   Still a tough one, but I think that contract would make the current lender the seller. 

It's also possible, if unlikely? that the lender already has a dil from the homeowner, though unrecorded.  It's the delivery of the dil which passes title, not recordation.  So as long as the dil is recorded prior to the deed to the new buyer, shouldn't pose a problem.  But if that's the case, the new buyer as well as his lender should have some kind of actual notice of the dil since there is no constructive notice of recordation.

Since you're doing the title commitment, you, the buyer, and the new lender are concerned about who the seller is.   Maybe you could show the seller as the current lender with a requirement for recordation of the dil.  But wouldn't you still have to do a search under the homeowner's name for any other liens (IRS comes to mind) which might need to be listed if not addressed?  Or how about getting the trustee's sale guarantee used for foreclosures?  

Anyone who reads sourceoftitle knows what I think about this whole mess, but if a homeowner wants to do a dil, it's his right. 




by john gault | 2012/10/01 | log in or register to post a reply

Authority of Management Company

Frankly, Charlene, this befuddles me.  From the info here, I see no indication of the management company's authority to bind anyone, ostensibly the lender.  Has the industry changed this much? There was a time when within 2 minutes of receiving such a purchase contract, a title company would have been on the horn appropriately demanding evidence of that authority.  Or let's say one spouse couldn't attend closing as the seller or buyer and the other spouse were to sign as poa.  I don't recall if the poa were recorded or not, but I do recall very clearly that the title company had to approve the poa prior to closing or no closing.  Maybe title companies are being provided evidence of authority and it's just not apparent here? And may I ask if when another party executes any instrument such as a NOD on behalf of the deed of trust trustee if title companies are being provided evidence of the authority to do so?

by john gault | 2012/10/01 | log in or register to post a reply

You bring up a good point


You bring up a good point relating to authority. Of course, we always request the necessary documentation to insure that the person sigining the contract on behalf of the actual seller(bank) has the authority from the bank to do so.  As you correctly state, immediately following receipt oft contract of sale we request the necessary documentation so that we know we will be able to proceed.  This however does not resolve the conflict relating to the languate "owner of record" vs. authorized signatory. 

As to your question relating to the NOD issue, customarily, in Maryland, there are recorded documents that authorize a sub. trustee to execute the NOD. 

by CHARLENE PERRY | 2012/10/03 | log in or register to post a reply

Substitute trustee v on behalf of sub trustee's

Well, I'm sorry if I couldn't contribute to the answer to your intial querry.  I did try!  My own question was in regard to when one sees a NOD executed by so and so for the sub trustee.  Maybe you don't see that in Maryland.  I see it quite often.  Something like this:

XYZ Trustee

 _________________ (someone with Execudocs signs) 

by Execudocs

I was wondering, if you ever see this, if you ask for docs which demonstrate that Execudocs has authority to execute for XYZ, the sub trustee.  

The "owner of record" is the homeowner/party in title in public record  unless the dil has been recorded, in which case it wouldn't be the issue it is (who's the seller). Sounds like you're being told to put a square one in a round hole.  

by john gault | 2012/10/04 | log in or register to post a reply



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