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What rights does a lender have to reclaim a house?

Buying a home or a parcel of property is a significant legal undertaking. The law takes seriously the transfer of land rights from one person to another; therefore, when a proposed sale of real estate is made, individuals must be sure that any and all title issues are in line. If a buyer cannot pay the full amount of the seller's asking price but still wants to purchase the property, the buyer will likely secure a loan for the amount of the purchase price that they cannot cover out of pocket.

When a mortgage loan is used to purchase property, different states look at who owns the property in different ways. In Tennessee, property transfers subject to mortgages are addressed under a title theory of law. This means that the buyer of the property does not actually hold legal title to the parcel or residence, but rather, their lender does. The buyer takes equitable title, which means that they may live on the property or in the home; however, they must satisfy the conditions of their loan in order to obtain legal title.

If a buyer defaults on their mortgage in a title theory state, like Tennessee, then their lender may simply exercise their legal title rights and take the property back. Since the property secures the loan, they may foreclose on the property and force the buyer to pay up or move out. The fact that a homeowner does not have legal title to their property can cause serious problems for them if they cannot pay down their mortgage.

Mortgages are common, but so too are challenges to paying them off. Readers have options when debt and missed mortgage payments begin to haunt them. Debt relief attorneys can help them protect their property interests and keep them in their residences even when money problems develop. It is important to consider your options, such as bankruptcy, when debt problems arise.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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