Title Search Issue unresolved

[Cathy Pope]

[I live in Virginia. My brother and I recently sold my dad's home of which he left to us in his will. He paid off his primary mortgage (does not have any other loans) just before he died and we have that release of mortgage and it was registered with the County of Henrico to release the deed as well. We sold the home - it is a done deal. We also paid for a bond to cover the law which would hold the funds in probate for a year after my dad's death - with the bond they can release the funds immediately to us. Again - not a problem. However, the attorney's now are holding the funds because they state there was a question from the title insurance company - they said the county still has a hold on the original dead from 16 years ago when the house was first bought. They know this is the original loan and it is a paperwork error, and they know the loan has been paid off today to the last holder of the loan. But they have to trace the loan for 26 years to find out who did not file the correct paperwork with the county. You throw in the fall of the savings and loans in the 70's and the many transfers of the loan from bank to bank due to all bank mergers over the years - and this seems to become an impossible task here. What is our legal standing here. Seems they have no interest to really resolve the issue and will not be open with us on the process or regular updates as to where they are. We are told the house is sold and it is not ours now -yet we have no money from the sale. Who is responsible and what course of action should we take in this matter.

[seniorjudge]

Originally Posted by Cathy Pope

[I live in Virginia. My brother and I recently sold my dad's home of which he left to us in his will. He paid off his primary mortgage (does not have any other loans) just before he died and we have that release of mortgage and it was registered with the County of Henrico to release the deed as well. We sold the home - it is a done deal. We also paid for a bond to cover the law which would hold the funds in probate for a year after my dad's death - with the bond they can release the funds immediately to us. Again - not a problem. However, the attorney's now are holding the funds because they state there was a question from the title insurance company - they said the county still has a hold on the original dead from 16 years ago when the house was first bought. They know this is the original loan and it is a paperwork error, and they know the loan has been paid off today to the last holder of the loan. But they have to trace the loan for 26 years to find out who did not file the correct paperwork with the county. You throw in the fall of the savings and loans in the 70's and the many transfers of the loan from bank to bank due to all bank mergers over the years - and this seems to become an impossible task here. What is our legal standing here. Seems they have no interest to really resolve the issue and will not be open with us on the process or regular updates as to where they are. We are told the house is sold and it is not ours now -yet we have no money from the sale. Who is responsible and what course of action should we take in this matter.

The person who is responsible is the person who took the money for the payoff of the mortgage but did not do the release.

Of course, that party may be long gone (and the lender may be long gone).

You may have to do a quiet title suit to get rid of that interest.

Check with a real estate attorney.

[nextwife]

Originally Posted by seniorjudge

The person who is responsible is the person who took the money for the payoff of the mortgage but did not do the release.

Of course, that party may be long gone (and the lender may be long gone).

You may have to do a quiet title suit to get rid of that interest.

Check with a real estate attorney.

Dad or the prior owner may have simply made the last payment, been sent the release with a letter to send it to the recorder's office, and simply placed the whole thing in a drawer, thinking that he had prrof of mortgage satisfaction. Many old thrifts used to do that, instead of sending the releases to the Recorder's office.

BEFORE doing a Quiet Title action, start working backwards and get on the phone. I have tracked down the "merged successors" to old S&Ls 20 years later and obtained "Duplicate original" mortgage satisfactions. You may spend a week on the phone, but it can be done, and I've done it many time. Have a copy of the mortgage and title report available to fax to them (they will need the recording info & legal description iff the mortgage). Ask the title company if they havve any record of who this lender "became". Most title companies have a list of who became who, because the mortgage releases often did not match the original mortgage lender.

You need to do your homework. You can also call the state Secretary of State office to determine which S&L bought out which other S&L assets or merged with them. You need to call whomever they are now and explain you need to obtain a release on an old paid off mortgage.

If that fails, THEN you should proceed with a quiet title action.

[Ciarraine]

Virginia Title 55 § 55-66.3 amended.
Release of deed of trust or other lien. Authorizes a settlement agent who has paid the obligation secured by a mortgage or deed of trust to release the lien by executing and filing a certificate of satisfaction. This procedure is available only if the settlement agent has delivered a notice of intent to release the mortgage and a copy of the payoff letter to the lien creditor and the lien creditor does not within 90 days notify the settlement agent that (i) another release has been recorded, (ii) the obligation secured by the mortgage has not been paid, or (iii) the lien creditor otherwise objects to the release of the mortgage. This optional procedure applies only to transactions involving not more than four residential dwelling units. The bill also clarifies that a release of a deed of trust may be delivered by courier. HB 302; CH. 862.

Getting in touch with the title company that recorded the most recent mortgage can work too.