Title problems can snag your closing

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3 Things Consumers Should Consider When Shopping for a Title Company

By Joe Gentile January 26

1-28-15You put your house on the market and you find a buyer right away who offered you not only your asking price but also was willing to pay in cash with no contingencies. Everything is going perfectly! But then it all comes crashing down.

The title company calls to let you know the title is not clear because there is an unreleased lien from 1997. They ask you for proof of payoff and release. You panic. Who keeps paperwork from that long ago?  And what is an unreleased lien?

The unexpected unreleased mortgage lien rears its ugly head all too often, according to those of us charged with shepherding consumers through the last stages of home buying.

This situation usually occurs when homeowners paid off their mortgage and continued to live in their homes without obtaining proof that the loan was paid in full. It is not until they try to sell or refinance that they discover they have an unreleased mortgage lien. By then the bank that originated the loan most likely has been absorbed by several bigger banks. It’s still possible to release the mortgage lien but it’s going to take a lot of work. And if you are the heir of the homeowner, it is going to be even more of a hassle.

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