Lender did NOT file lien against deed of trust

[mahall]

What is the name of your state? VA

Went to closing three days ago and had the settlement attorney sit me down: "Mr. Mike, I'm happy to inform you that your mortgage lender, Citi Bank, did NOT place a lien against the property that you are selling today. I'm required to give you an additional $295,214.44on top of your $260,304.00 capital gain".

Well, sure enough, I had the ENTIRE funds wired into my account today. Holy crap!

Now, what can Citi Bank do to collect on the lien they never had??

[seniorjudge]

You have to pay it back....

[efflandt]

They may not have had a mortgage lein, but they have whatever papers you signed when you got the loan. If you read that carefully, you will likely find a clause that says that the money you borrowed is immediately due and payable if you transfer your interest in the property used as collateral. So I imagine that they could get a judgement against you if you fail to pay them what you owe them. The IRS may have some questions too. So don't spend it yet.

I wonder if they would notice if you just kept making your usual payments? But if they escrow property tax (or insurance) or check whether property tax was paid, they would surely find out sooner or later.

[LindaP777]

Do NOT spend the money! Put it in the bank and let it collect interest.
I'd take a "wait and see attitude" if I were you! If the bank never recorded their mortgage, this could get interesting. When they come to you and ask for their money, agree of course to pay it, but you might be able to negotiate how much you owe. They might shave off a couple of thousand because your such a nice guy and you'll pay it without them having to take you to court!
Please post back with all updates, as I find this a very interesting story!!!