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Accommodation Recording Agreement
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Accommodation Recording Agreement
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Posted by Maria_CA on 6/18/11 1:37am
Msg #386758

Accommodation Recording Agreement

I have come across an Accommodation Recording Agreement. I have never seen this before, it is a form from a Title company and it mentions documents that are to be recorded as an accommodation. It does not need to be notarized, so I'm not too worried about it, but has anyone seen this before? I really have no idea.

Reply by Lee/AR on 6/18/11 7:05am
Msg #386762

Not familiar with the form, but have taken 'stuff' to 2 different local county recording offices for recording purposes & obtain recording data. My $50 fee-check per recording and a check for recording fees were included in the o/n package. Was not required to 'bring down' title (look for liens, etc.).

Caveats: I'm in a rural area, no lines, waiting, parking issues. However, while my county was a snap, the other county had a number of goofy non-issues that I had to stand and argue about... 4 people doing nothing but their 'procedure' was to record tomorrow morning what was brought in today.... they eventually complied with doing it NOW, but getting to that point wasn't easy.

Reply by GWest on 6/18/11 9:55am
Msg #386786

This is used by the TC or Escrow company, when they draw a document, which needs to be recorded, but there will no title insurance issued concerning this documents, and done only as an accommodation to the client.

Example: Lender wants property removed from the trust for the loan. Escrow draws a deed from the trust to the individuals. They also draw a deed which places the property back into the trust and record the deed, after the deed of trust is recorded, as an accommodation to the borrowers.

This is just one example and I can provide more. I have not had my coffee yet this morning, so hope this explains it.

Reply by LKT/CA on 6/18/11 11:22am
Msg #386801

<<<Example: Lender wants property removed from the trust for the loan. Escrow draws a deed from the trust to the individuals. They also draw a deed which places the property back into the trust and record the deed, after the deed of trust is recorded, as an accommodation to the borrowers.>>>

1. These days it's totally UNnecessary to pull a property out of trust to put it back in - a property can be refi'd while in the trust. I've completed signings for plenty of loans where the property remained in the trust.

2. Putting the property back IN the trust should not be an accommodation but a requirement - it was unnecessarily taken out so the LEAST escrow can do is put it back. In fact, if my personal refi docs had only the grant deed to take property out of my trust but no grant deed to put it back in, I would NOT be signing those loan docs.

Reply by GWest on 6/18/11 12:30pm
Msg #386814

I agree with you, most lenders now accept trusts, but

there are still a few lenders that will not loan on a property in a trust and require that the title is changed (had one just last month). The title insurance policy must state that the title is in the individual name. Technically escrow is not authorized to change the title after close, but most often they do, with the lenders unwritten consent, but this is done as an accommodation only. As a former escrow officer, I often had to draw an Accommodation Recording Agreement for our files.

This was just one example. It can also be used when a spouse is removed from title, per the lender's request, and put back after the Deed of Trust is recorded, I can go on with other examples, but I was trying to explain what an "Accommodation Recording Agreement" was to the OP.

Reply by GWest on 6/18/11 12:33pm
Msg #386816

Should also add

The Accommodation Recording Agreement releases the Escrow and TC from any liability should any problem arise after COE with regard to the change in title.

Reply by LKT/CA on 6/18/11 12:34pm
Msg #386817

Re: I agree with you, most lenders now accept trusts, but

<<<....there are still a few lenders that will not loan on a property in a trust and require that the title is changed (had one just last month).>>>

Those few lenders should be flogged with a wet spaghetti type noodle <hee hee!!>.

Reply by JanetK_CA on 6/18/11 6:48pm
Msg #386844

Re: I agree with you, most lenders now accept trusts, but

LOL!! I totally agree with you, Lisa. I still run into the same thing from time to time. One of the hardest things I have to do is not say anything when there's no Deed to put the property back into the trust. I usually try to find some way of finding out if the borrowers know that this step has to be taken for the property to be back in the trust after the loan closes. Fortunately, most seem to be aware of that these days - but few are happy about it.

In my experience, certain VERY large title companies refuse to take responsibility for that accommodation recording and will leave the borrowers to their own devices. (They've probably been burned in the past by taking that on. Could be lots of liability if an error is made in the process.) Seems to me also (although I hope this is old news or just perception) that some entities won't allow the property to be left in the trust because it's more work for them to deal with when the property is in a trust.

This has become a very common issue with me, as it seems like many of the folks in my area who can qualify for loans these days can also afford to have a family trust created. Oh well... Thank goodness some are still able to qualify for a loan these days! Smile



Reply by GWest on 6/19/11 12:13pm
Msg #386872

Re: I agree with you, most lenders now accept trusts, but

I was involved in a sale transaction several years ago, while working as a Transaction Coordinator, wherein the owner previously refinanced and the property was removed from the borrowers trust, per the lender's instructions. Escrow did not accommodate the Borrower by placing the property back in the trust, nor did they advise her to contact her attorney to have the property placed back into the trust. I do not believe that she was aware that she needed to do this. Several years later the borrower died and the family put the property up for sale. Since the property was no longer in the trust, it took quite a bit of time and attorney's fees to resolve the issue. The family needed to obtain an attorney to resolve the issue and after several months, they were finally able to place the property up for sale. So much for the savings incurred by having a trust.

When an Escrow company or TC does not accommodate the borrowers in this matter, while they are signing the deed to remove the property from the trust, I mention that they should look into putting the property back into the trust after COE. Some are not aware of this step, but as you stated Janet, most seem to be aware, but not happy about the added expense.

Reply by JanetK_CA on 6/20/11 4:08pm
Msg #386960

Re: I agree with you, most lenders now accept trusts, but

You bring up an interesting point. Borrowers go to a significant bit of time and expense to create family trusts to avoid probate and all the other issues that come up under California law when a person dies. In some ways, I think that someone in the process should be responsible for at least letting borrowers know the potential consequences - and the simple solution - of refinancing a property when a lender REQUIRES it be taken out of the trust. And it seems to me that party should be the lender or the title co, since they're the ones who are insuring the title. (We shouldn't have to be the ones, but I usually at least suggest they ask their loan officer about that. If I get the idea that they have no clue, I can't just ignore that. However, I find a way to bring it up by doing something like asking questions instead of giving information so it's clear that I'm not giving advice.)

I'd bet your example is only one of very many. If I were the heir of someone in that situation I'd be furious. And in fact, I've run into a good many people at the table who were very unhappy when there wasn't a Grant Deed included to put the property back into a trust. In fact, I can think of at least one situation where they refused to sign the documents without that second Grant Deed. Fortunately, it was a daytime signing, and the tc had another Grant Deed sent to that borrowers email before we finished the signing!



 
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