- October 19, 2022
- Posted By:hmvreeland
A lost note deed of trust bond is a type of Surety bond. It is required when:
- A debtor requests for a deed of trust to be released after the debt has been paid in full, but the promissory note has not been surrendered to the trustee by the beneficiary.
- The beneficiary is untraceable.
- The deed of trust was not reconveyed after the debt was paid in full.
- The original note was misplaced, destroyed, or lost.
The purpose of a lost note bond / deed of trust bond is to protect the note Trustee or Substitute Trustee when recording a reconveyance to clear a real estate title when the original note is lost, cannot be located or the note beneficiary cannot be located. It protects the trustee in case a person files a claim in the future claiming that the loan was never paid in full.
How Does it Work?
A lost note bond / deed of trust bond is a legal agreement between three parties: the Principal – that is the property owner; the Obligee – that is the Trustee and / or the lender, usually a financial institution; and the Surety – the company that issues the bond. If a claim is filed, the Surety investigates it and pays it out after ensuring its validity. The Principal is expected to compensate Surety for any amounts paid.
How Much Does a Lost Deed of Trust Bond Cost?
The cost of a lost note bond in California depends on various factors such as the age of the note and the availability of payoff evidence. If payoff evidence is available expect to pay as low as 1.5% of the bond amount.
How to Get a Lost Deed of Trust Bond?
Follow these steps to get a lost deed of trust bond:
Step 1: Fill out the bond application and gather evidence of payment or provide a statement of the circumstances. Be sure to verify your details, ensuring that the information provided by you is up-to-date and accurate.
Step 2: Once the Surety bond company receives your application, they will review it. In this step, you will be required to submit necessary documents that the Surety company will want to review in order to determine your eligibility.
Some documents that Surety bond companies need include a copy of the title report and copies of canceled checks as proof of payment.
Step 3: The Surety bond company will start the underwriting process. An underwriter will review the document submitted by you to evaluate your financial health and the likelihood of a claim based on the circumstances. Once the underwriting process is complete, you will be asked to pay the premium or arrange for payment through escrow (escrow demand).. Once that is done, the Surety company will issue the bond.
H.M. Vreeland is one of the most trusted Surety bond companies in California. Our Surety bond specialists help businesses and individuals identify and get the right types of Surety bonds to suit their needs. To consult with one of our experts, call (415) 566-3401.