What happens to the original deed of trust upon refinance?

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What happens to the original deed of trust upon refinance?

My husband financed 70 acres of land via a commercial balloon loan. The bank asked me to sign off on papers stating they had advised me of dowager’s interest in the property, which I did. I then found out they filed a deed of trust with both our names on it. The balloon loan is now due and my husband is in the process of refinancing with another balloon loan. I told him that I will not be signing anything this time. Is the original deed of trust valid or is it null and void since he is refinancing?

Asked on May 6, 2011 under Real Estate Law, West Virginia

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Here is my understanding of a deed of trust.  A Deed of Trust is often used instead of a mortgage in the sale and purchase of real property other than agricultural farm land.  Under the Deed of Trust, title is conveyed by the seller to a trustee instead of to the purchaser. The trustee holds the title as security to ensure the purchaser's performance of its obligations (including payment of the purchase price, maintenance and upkeep of the property, payment of taxes, etc). If the borrower defaults in payment, the balance becomes due and payable and the trustee may sell the property.
The Deed of Trust contains uniform covenants regarding payments, funds for taxes and insurance, prior mortgages, hazard insurance, occupancy as principal residence, care and maintenance of the property, protection of the lender's security, and other standard clauses. The borrower waives all right of homestead exemption in the property.  A dowager's interest is a widow's interest and I am curious as to what you really signed.  You need to bring the documents to an attorney to review here.  If he is refinancing the loan it may not effect the original deed of trust but really it should replace the original.  Is it with the same lender?  Please seek legal help.  Good luck.   


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