Are loan modifications recorded with the county?

Question

I don't see the loan mod on the title report for a property I'm checking out in Los Angeles County, so I was just wondering.

Jeff S. · Answer

It depends what was modified, Logan A.. If only the note, for example to extend the maturity date and nothing else, then this would not generally get recorded.

If anything changes the Deed of Trust, which would have been originally recorded, then any applicable modification should also be recorded. In general, anything that changes the principal balance owed affects the DOT and should be recorded.

Even when you modify a note, it's sometimes not obvious if the DOT has also been affected, so we almost always record the modification, just to be safe.

Wayne Brooks · Answer

Generally from an institutional lender, yes, after the trial period is over and it is permanently modified. At least in Florida anyway. But, why do you ask?

Logan Allec · Answer

Thanks @Wayne Brooks and Jeff S Na. My issue is that my potential seller believes that he has a "case" to get him out of foreclosure because the loan modification (which reduced the principal balance) was not recorded and did not show in the title search. Does he have a point? Or is it all wishful thinking?

Bill Hamilton · Answer

Probably total crud unless he can produce a document saying the principal balance has been reduced.

Wayne Brooks · Answer

Wishful thinking. I would also question whether he received a true principle reduction.

Are loan modifications recorded with the county?

Are loan modifications recorded with the county?

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