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?

UPDATED: Mar 6, 2012

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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


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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