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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] More edification on the topic of reinstating an existing lien. Posted by Ward-CA- on April 28, 2002 at 3:42 PM In Reply to: Jousting with the right of reinstatement - revisited posted by Greg on April 28, 2002 at 3:02 PM : Ward, back in November you and Dave were talking and you said: : "Dave, we also reinstate the delinquent payments directly rather than through any escrow or title company." : I don't understand this process. Don't the escrow instructions usually say essentially to pay the money (to existing lender and seller) when the deed, title ins, disclosures, etc are received? Isn't that why we need an escrow - to make sure all parties perform all steps before closing? : When do you reinstate, before or after recording the deed? : If done "outside of escrow", how do you explain this in the offer and/or escrow instructions? : Greg =•=•=•=•=•=•=•=•=•=•=•= Greg, In a pre-foreclosure sale situation, where time is of the essence and where we’re taking title subject to the existing financing to avoid the due-on-sale consequences, we don’t want to unnecessarily alert the lender. And that might happen if we involved the title or escrow company in the reinstatement of a delinquent loan. So the reinstatement amount just appears to come from the existing owner, outside the escrow. The escrow instructions just reflect that the buyer and seller will cooperate and work jointly together to cure the delinquency of the existing lien and that escrow is to be held harmless by both parties from any and all consequences therefrom. Escrow and title companies don’t care if we are getting around the due-on-sale clause in taking title subject to the remaining lien. Their functions aren’t involved nor impaired in any way—so they don’t see any reason to be a whistle blower. Hope this helps. Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, back in November you and Dave were talking and you said: : : "Dave, we also reinstate the delinquent payments directly rather than through any escrow or title company." : : I don't understand this process. Don't the escrow instructions usually say essentially to pay the money (to existing lender and seller) when the deed, title ins, disclosures, etc are received? Isn't that why we need an escrow - to make sure all parties perform all steps before closing? : : When do you reinstate, before or after recording the deed? : : If done "outside of escrow", how do you explain this in the offer and/or escrow instructions? : : Greg : =•=•=•=•=•=•=•=•=•=•=•= : Greg, : In a pre-foreclosure sale situation, where time is of the essence and where we’re taking title subject to the existing financing to avoid the due-on-sale consequences, we don’t want to unnecessarily alert the lender. And that might happen if we involved the title or escrow company in the reinstatement of a delinquent loan. So the reinstatement amount just appears to come from the existing owner, outside the escrow. : The escrow instructions just reflect that the buyer and seller will cooperate and work jointly together to cure the delinquency of the existing lien and that escrow is to be held harmless by both parties from any and all consequences therefrom. : Escrow and title companies don’t care if we are getting around the due-on-sale clause in taking title subject to the remaining lien. Their functions aren’t involved nor impaired in any way—so they don’t see any reason to be a whistle blower. : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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