The party who is owned an obligation can sign a release letter. A release would discharge the contract, terminating the contract and both parties’ obligation to one another.
Deed in Lieu of Foreclosure/Release of Mortgage
To prevent a foreclosure, the deed and the property can be transferred to the beneficiary of a trust deed. A mortgage release, more commonly referred to as a deed in lieu of foreclosure, is the voluntary transfer of one’s property to the lender with the intention of releasing the borrower’s interest in the property. Borrowers who choose this option typically do this to avoid having a foreclosure attached to their name, which would prevent them from purchasing a property for the foreseeable future.
There are various mortgage release programs that vary by lender. Some programs allow the borrower to remain in the property for a specified period of time, usually one to three months without paying mortgage payments. Some programs give the borrower the option to rent the property for up to one year.
A deed of lieu is most often utilized by borrowers who can no longer afford mortgage payments, cannot qualify for a refinance or loan modification, are facing a long term financial hardship, or those who owe more on the home than its value.
Lien Release
In order to be released from a mechanic’s lien, a property owner must pay the full debt amount, settle the debt, or establish a repayment plan in order to terminate a mechanic’s lien claim.
A mechanic’s lien can be released if the lien claimant files a lien release form with the county recorder’s office.
In the unusual event that a lien claimant does not remove his or her invalid lien claim, a property owner may petition the court for a decree to release the invalid lien.
Courts commonly rule in favor of parties who have valid documentation. Therefore, a property owner should make sure to maintain all appropriate documents.
