Unreleased Security Deeds
When a home goes under contract, most sellers assume the hard part is over. However, some of the biggest problems don’t involve the buyer, the price, or defects in the house; they involve title issues that can delay or even derail a sale.
Fortunately, having a diligent closing attorney conduct a proper title examination will uncover potential title issues that can be addressed and fixed before they delay closing.
One of the most common title issues is an unreleased security deed. Even if a loan was paid off years ago, the security deed – commonly referred to as a mortgage – may still appear open in the public records. This can happen for several reasons:
- Simple oversight or negligence.
- A bad deed reference.
- A typographical error
- Indexing error by the clerk
- The lender was acquired by or merged with another company, and the new entity did not have the information to file a release.
If the mortgage has not been properly canceled, it remains a “cloud on title” that title insurers will require to be resolved before insuring title, thus potentially delaying the closing.
It is important to find out early if there are any unreleased mortgages affecting the title because it usually takes a few weeks to get them properly released. The process often requires:
- Tracking down prior lenders.
- Requesting payoff histories.
- Obtaining copies of previous settlement statements and loan payoffs from prior closing attorneys.
- Working with title insurance underwriters to find solutions.
Title issues are not unusual, but they are time sensitive. The earlier they’re identified, the easier they are to resolve. That is why working with an experienced Georgia closing attorney and title company makes all the difference when closing on a property.
William Jarrett is a real estate closing attorney with Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.