You are ready to sell your house. You’ve prepped everything, talk to a listing agent and now you need the title search but, the title company comes back with a unique and strange red flag; the title search shows a lien that you didn’t know about. What can you do?
How can you not know about a particular lien your property? Well, it has happened. Take for instance a situation where we tried to sell a property and the title search showed a lien that the owner did not remember that should have been paid off in 2013. The tough part is the original bank that lent the money to the homeowner no longer existed. This mortgage was sold several times over the years and the last known bank cannot find any trace of the lean, so how do we go about clearing the lien from the title?
Many times you might not recognize particular loans or liens on a title because it was made with a certain bank and that alone has since been sold to different banks or absorbed. The first thing you need to do is try to remember as much as you can about that particular lien or loan. Use the Internet to track as much information about the original lender as possible. If it is the same lender and the lenders out of business you may need to find all the documentation from the original loan and collect any proof that it might’ve been paid off.
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Another issue is a mortgage from a prior owner that was never released so it continues to show up on a title search. Sometimes a future title company may see that a lien is on the search but ignored it due to the passage of time. Sometimes loans are more than 30 years old without any adverse notifications attached to the title may actually have been paid off in full but it needs to be verified.
Most title companies are quite knowledgeable on banks, lenders and who absorbs wide when it comes time to sell or absorbed a mortgage. This can lead to quite a wild goose chase but if you are certain that you’ve paid the loan, any and all documentation to that fact needs to be collected and provided.
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However, if there is a lien against the property that has not been paid off this will need to be paid before you can sell the property. If the title company ignores the lien, the lender can no longer go back to the homeowner for conversation and it becomes the responsibility of the title company.
Each situation is unique but most of the time these details can be worked out prior to listing. Contact our office today to ask your questions about liens or selling your home.