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Time Period to Remove Second Mortgages

Once a mortgage is paid or satisfied, the beneficiary under the deed of trust has 30 days to deliver all documents to the trustee. To allow reconveyance. California Civil Code Section 2941(b)1 provides:

(b) (1) Within 30 calendar days after the obligation secured by any deed of trust has been satisfied, the beneficiary or the assignee of the beneficiary shall execute and deliver to the trustee the original note, deed of trust, request for a full reconveyance, and other documents as may be necessary to reconvey, or cause to be reconveyed, the deed of trust.

This statute is most relevant in Chapter 13 Lien Strip Cases involving second mortgages. There is a statutory duty for the second mortgage to remove itself from title at the end of the case. Generally upon plan completion and discharge, the beneficiary of the deed of trust has 30 days to act or face damages. Failure to act will result in statutory damages of $500.00, actual damages, and attorney fees and costs.

(d) The violation of this section shall make the violator liable to the person affected by the violation for all damages which that person may sustain by reason of the violation, and shall require that the violator forfeit to that person the sum of five hundred dollars ($500).

If you have recently completed a chapter 13 lien strip case and/or recently paid off or settled a second mortgage. Be sure to confirm the lien has been removed by a reconveyance. If not timely done, contact our office and we can pursue the offending creditor for damages.

Written by Michael G. Doan

 Owner of the Oceanside Bankruptcy Attorney office, Michael not only manages his business, but is also a highly skilled San Diego Bankruptcy Attorney with over 20 years of experience. He specializes in many fields, such as: insolvency, bankruptcy, consumer rights, debt negotiation, creditor collection abuse, estate planning, contracts, real estate, and tax. Michael is currently concentrating his practice solely in Bankruptcy Law and is a Board Certified Specialist in Consumer Bankruptcy Law by the American Board of Certification, one of only fourteen such attorneys in all of California. Mr. Doan also practices on the cutting edge of bankruptcy law, and was the first attorney in the entire Southern District of California to file the very first Chapter 7 Bankruptcy and very first Chapter 13 Bankruptcy under the new Bankruptcy Laws which went into effect on October 17, 2005.

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