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.