Does someone mind offering insight to the value of a mortgage release, in the perspective of a lender as opposed to letting a house go to foreclosure or offering it up as a short sale.
Here is a link to the description I read surrounding mortgage releases.
Also, to perspective buyers, can you attempt to buy a property from original owner even when the mortgage has been released or would you have to somehow contact the bank?
What you are referring to is more commonly known as a "deed-in-lieu". This is when the homeowner will give the property deed/title back to the bank, and move out of the property gracefully without having to go through a foreclosure and eviction process. This is something a distressed homeowner would need to apply for to get the bank to agree to do it, the process is very similar to a short sale, and would have nearly the same requirements from the bank (homeowner would need to prove hardship). The bank would rather do this than a foreclosure, because it would cost them less money to take the property back. That being said, depending on the bank, it may be hard to actually get done, banks are difficult and dont always make sense. They let many short sales expire and go to foreclosure...
TO answer your question, once a deed-in-lieu is done, the bank owns the property. You would need to contact them if you wanted to buy it. In most cases, they would turn it over to a local realtor to list/sell it.
Awesome! Thanks a ton @Larry Chafe
A mortgage release can occur in several situations other than a deed in lieu. The purpose of a release is to record that a property is no longer encumbered by that specific mortgage. Some examples follow.
For example, in a short sale the mortgage lien gets released (rather than satisfied).
And when a blanket loan is taken with several properties as collateral and where one of those is sold, a release is also used.
For your second question:
"can you attempt to buy a property from original owner even when the mortgage has been released or would you have to somehow contact the bank?"
If the mortgage has been released and a release of lien has been filed at the county clerk, this just means that they property is now free and clear of that encumbrance and the owner of the property does not need to satisfy that encumbrance before selling the property.
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