Can a bank keep the deed to my house if I pay it off, if I have another house with the same bank in foreclosure?

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Can a bank keep the deed to my house if I pay it off, if I have another house with the same bank in foreclosure?

I plan on paying off my house in a couple years. I have a rental home that is in foreclosure. They are both financed through the same bank. Can the bank hold the deed to my house when I pay it off or penalize me in any way?

Asked on March 6, 2012 under Real Estate Law, New Mexico

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Whether or not your rental that is in foreclosure would subject you to a deficiency judgment depends upon the laws of your state as to judicial and non-judicial foreclosure (assuming there is a difference). For that I suggest that you consult with a real estate attorney about this issue.

As to the same bank holding loans on your home and a rental that might go into foreclosure, the bank if you pay off the loan to your home must give you a "full reconveyance" of the mortgage. It cannot penalize you by not giving you such a document due to the issues you might have as to your rental.


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