After my mortgage refinance was closed I was notified by the title agent that there were documents that were not signed. The documents were not part of my original closing package. The document was a 1-4 family rider (Assignment of rents) and an updated copy of the mortgage paperwork reflecting the addition of this rider and the addition of an "acceleration" remedy. I contacted the lender who directed me to the legal department of the title company since I did not have this on my original mortgage. The property is a 2 family duplex in which I occupy one unit and a tenant occupies the other. The house value is more than the mortgage and my income should have more than satisfied the approval. When I spoke to the legal department at the title agency I was told that this is a legal requirement and only matters if I am late. I realize that this makes a difference only if I do not pay the loan, but I have concerns about the lender having a stake in all the appliances, curtains, rugs. I also had thoughts or changing the property to a one family in the future which requires approval from the lender. I sent back the paperwork yesterday signed via email, but feel uncomfortable about this document and signing without the notary present. The more I look online the more I think the lender has secured a loan for their own purposes without the legal requirement stated or advance notice. Was I required to send this paperwork back? If not can I tell them I do not want it changed?
State/Country relating to question: New Jersey
Online Research. Spoke to lendor
Hi - my name is XXXXX XXXXX X'm a Real Estate litigation attorney here to assist you.
I know you understand that I have not seen your mortgage loan papers, so I can only tell you in general terms about how this works. In my practice, I have closed thousands of commercial and residential loans, and ANY loan that has a rental property held as collateral always has an assignment of rents agreement in the loan paperwork. As the mortgage representative told you, this is only actionable if you fall behind on payments. Basically, it would allow the lender to notify the tenant to pay their rent to it instead of you if the loan were to go into default.
Also, it is very likely that there is some provision in the mountain of paperwork that you signed that said the loan required an assignment of rents AND there should be a provision that says you agree to sign any documents after closing if they were overlooked or left out by mistake.
Thus, there's likely nothing you could have done about it even if you wanted to. However, now that you've signed and returned the documents, the only way you could try to stop it is if you're still within the 3 day rescission period for the refinance. However, if you were to cancel the loan, the proceeds would be pulled as well.
Thus, the botXXXXX XXXXXne is that what you signed is very typical and it's likely that the bank could have forced you to sign through a court order OR cancel the loan if you refused.
BV Rated by Martindale-Hubbell; SuperLawyer rating by West
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).