As a business based in Chicago, legally navigating the complex process of reconveyance in Illinois can be daunting. The concept of reconveyance entails the transfer of title in ownership back to the original borrower in exchange for payment of a full balance of outstanding debt. Reconveyance is important in the state of Illinois as it relieves borrowers of continued mortgage debt liability, establishes ownership, and serves to restore credit.

To further understand the process of reconveyance in Illinois, one must understand the ever-changing context of records management, local regulations, and creditworthiness. Reconveyance itself is part of an amends that the deed of trust can inherently impose a lien whereby a third-party lender secures their interests. This concept of lien is important to understand in the context of a reconveyance process as it can exempt, or even erase, the lien when done correctly.

When expanding further, the reconveyance process can be divided into seven separate steps: 1) Verification and validation of mortgage debt satisfaction and payment, 2) Researching existing titles and liens against the designated property, 3) Title clear and cancellation of the note, 4) Creation of new deed from lender to borrower, 5) Filing of deed with the secretary of state, 6) Special handling of difficult title searches, and 7) Understanding of the commonly implemented reconveyance insurance policies.

Verification And Validation Of Mortgage Debt Satisfaction And Payment

The first step of the reconveyance process is to ensure that there is full satisfaction of mortgage debt for properties based in Illinois. To do this, lenders must verify that mortgage debt has been, or is in the process of, being fully paid to prevent further liability from accrued interests or late payments. After this stage is complete lenders must then document a signed release showing that all payments have been received and an avoidance of any default from the borrowers side.

Researching Existing Titles And Liens Against The Designated Property

Another crucial step in the reconveyance process is to research and double check existing titles and liens that are against the designated property. It is essential that after the debt is verified and paid off that any other existing liens or titles from other lenders against the property is found beforehand to avoid further complications. Additionally, the research is necessary to ensure that all the necessary paperwork and paperwork recording fees are secured before filing the deed.

Title Clear And Cancellation Of The Note

The third step in the reconveyance process is to secure a Title Clear, and cancellation of the Note. A title clear is defined as when the title of the real estate is released from liens and charges once the buyer has finished payment for the mortgage in full. It is important that the lender secures a title clear as this is when the note on the borrower’s behalf is cancelled, which will prevent any further confusion or disputes.

Creation Of New Deed From Lender To Borrower

The fourth step of the reconveyance process is the creation of a new deed from the lender to the borrower. The bondsman, or other third-party entities arising from an agreement between lender and borrower, will file the deed as a documentation of transferring the property’s title from mortgagee (lender) to the mortgager (borrower). Filing the deed is essential to ensure the borrower’s records are legally up to date with the government.

Filing Of The Deed With The Secretary Of State

The fifth step is the filing of the deed with the Secretary of the State in order to officially complete the reconveyance process. This step is essential for the protection of the borrowers as the filing of this deed notifies any other potential lenders/bondsman that the property has now been released from all prior charges or liens.

Special Handling Of Difficult Title Searches

In certain scenarios, some lenders may face issues that arose during title searches when researching existing titles or liens against the designated property. If this occurs, lenders and borrowers must work together to obtain all the necessary documents to ensure that title searches can be conducted and any existing issues related to the property can be solved.

Understanding Of The Commonly Implemented Reconveyance Insurance Policies

The last step of the reconveyance process is to gain a basic understanding of unilaterally implemented reconveyance insurance policies. These policies are implemented by the lender as a way to protect the borrower from any unforeseen financial consequences that could arise from the reconveyance of the deed. It is important to understand the basics of these policies in order to be certain that all involved parties are financially and legally protected.

Navigating the complex legal framework of reconveyance can be difficult to manage, but with the right knowledge and understanding of the process, your Chicago-based business can have the title to their real estate reinstated in due time. Working with legal advisors familiar with Illinois state laws is a great first step towards having the assistance you need to successfully complete the reconveyance process to regain title of your real estate.




Title Clearance