How Certain Are You That You Are the 100% Owner of Your Home?

Posted By Jay Kaufman || 8-Jul-2013

For Clients, Advisors, Community: Do you know for sure that there will be no title problems when you go to sell your home? Are you sure everything is in order? As part of our regular process, we want to be certain our clients’ real estate is titled consistently with their estate plan. It is occasionally necessary to look at the county records or if we find something suspicious, obtain more detailed title records to ascertain whether there are “clouds” on the title to property.

Recently, there has been an increasing problem with the recordation of fraudulent deeds. In June, the General Assembly passed legislation that allows County Recorders to investigate fraudulent deeds. This is an interesting development which demonstrates the importance of ensuring “clear title” to your home (and other properties).

Increasingly, we find a mortgage lien on the property when our clients insist the loan was paid off years ago. This condition occurs due to one of two problems:

  • The loan was paid off but the lender failed to record or send out a release deed.
  • The loan was paid off and the lender sent the release deed to the borrower. However, the borrower did not know what to do with the deed. The release was not recorded on the public records and therefore, a lien remains on the property.

We’ve just run across the first problem on behalf of a client. We’re not even sure whether the lender exists!

These problems must be cleared up before the house can be sold. Sometimes, if the title problem cannot be resolved, a claim will be made to the title insurance company. That’s why it’s important to have title insurance for the full market value when you acquire property.

Often, it is difficult to track down the institution that made the loan 30 years ago. There has been a lot of consolidation in the financial services industry. Remember St. Paul Federal? Karen and I had a loan with them once. Remember New Century Financial? Those people started the crash in the mortgage business. Neither are still around. Yet, there are mortgages still recorded with those companies as the mortgagee.

Our advice is that if you have paid off your mortgage, make sure that the release is recorded at the Recorder of Deeds for the county in which the property is located; Don’t just put the release in the drawer! Present practice in most institutions is to send their release to be recorded.

It makes sense to check the status of title on your properties every few years just to make sure there is no problem. This is a service we routinely provide at no additional charge for clients who are members of a Family Lifetime Care Plan. For information about the plan or anything discussed in this blog, call or email me or Karen privately (not by posting a comment to the blog).

It would be a shame to wake up one morning and find that you don’t own your property 100%.

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