California Lost Deed of Trust Bond |
AmeriPro Surety Bonds
California Title Companies; Requirements
You’re finally ready to make that move: either to refinance your California home, or better yet, sell it, take the profits, and move to a much more economically, socially, and tax-wise friendlier state than California.
Just as you are about to close on the refinance or sale of your home, your title company informs you that a lien or deed — which you’re certain you’ve paid — cannot be located; there is no reconveyance on record.
And in your own search, either the company that provided the loan is out of business, or the chain of ownership is lost through MERS, the mortgage electronic registration system.
The upshot of all of this is that in order for the selling or refinancing of your California home to take place, the title title company requires you to obtain a California lost trust deed surety bond.
Purpose of Your California Lost Trust Deed Bond
The California lost deed of trust bond serves as a financial guarantee for the title company that absolves them of any financial liability should at some point (in California the statutory limit is 3 years) some entity produces proof of an active, non-reconveyed deed of trust.
In essence, a California lost deed of trust bond transfers the financial liability to you, the purchaser (or principal), in exchange for the title company allowing the refinancing or selling of your California home.
California statutes also require you to provide Lost Deed of Trust Affidavit. It is commonly thought that this affidavit is filled out by the surety bond company, but the truth of the matter is that you, the Principal, must complete this form. Our agency can provide the form for you to complete.
Obtaining a California Lost Deed of Trust Bond — Not Too Difficult
Since it is the title company which requires a lost deed of trust bond, they will also be the ones to provide you with the information needed to obtain your bond.
You, in turn, will need to provide that to us. These are:
- The amount of the surety bond that the title company wants you to obtain. While California there is a statutory multiple of the lost deed, the title company can, at its discretion, require an amount less than that multiple. We, however, need to know that amount;
- A copy of the preliminary report. Your title company knows what that is; we just need a copy of it;
- A copy of the deed of trust;
- Summary from you as to “what happened” surrounding the lost deed. Was the note paid? Were any efforts made to locate the lender? What were the results? Etc.
- A California lost deed of trust surety bond application from you. Ideally, we’ll get that application to you via Docusign.
Qualifying and the Premium
Our agency has the ability to provide a more streamlined, quicker processing of California lost deeds of trust bonds up to a $100,000 requirement. There is, however, a credit check for any CA lost mortgage deed bond amount.
An amount above $100,000 is also subject to an underwriter review. This review will also include a standard credit check inquiry. For lost deeds of trust above $100,000, a financial statement is also required.
With respect to a financial statement, note that underwriters are typically looking for you to demonstrate enough assets to cover the amount of bond were there ever a claim. Note also that financial statements are based on your word alone; there is typically never any independent verification of the amount stated.
Upon approval of your CA deed of trust bond, the premium is a onetime payment. The bond is active for California’s statutory limit for lost deeds of trust, 3 years.
Credit Concerns, If Applicable
Approval of your California lost deed of trust bond is made much easier with good credit. However, those whose FICO scores are lower may still qualify — and at a good rate.
Our agency has the ability to potentially have a surety company review your application from a company which has their own internal credit scoring.
What this means for you is that what may be a poor FICO score may not be poor by their underwriting standards. Bear in mind, however, that this is done on a case-by-case basis and so therefore may not be applicable to your credit scoring.
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