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September 5, 2012 4:00 AM   Subscribe

When buying or selling a house, how common is it for incorrect or irrelevant information to appear on a title search? What's the best way to prove that this information isn't legitimate--to drive the point home that it's wrong?

Old loans that were paid off years ago. Delayed payments on taxes that were resolved. Loans taken out by a previous owner. Strange, unresolved judgments that the bank suggests "relate to another person with a name similar to yours."

These things seem to be popping up on title searches of late--not in the form of liens on the property, but as miscellaneous information that seemingly came out of nowhere.

Is it common for title searches to show irrelevant information like this? What do banks expect from a homebuyer to remedy the mistake? Will a simple answer like "that's incorrect" or "this doesn't apply to me" be sufficient in most cases, or will there be instances in which banks request more paperwork? If so, what's the best way to build a case showing that the information is irrelevant, and that the title is clean?
posted by Gordion Knott to Home & Garden (7 answers total) 1 user marked this as a favorite
 
Are you financing or refinancing?

I don't know if the mess related to MERS is helping, either.

When I had this happen in the early '00s:

- the title company of the buyer turned up a stray mortgage
- I got a copy of said mortgage statement
- determined the errrror
- had the bank holding the stray mortgage issue a full clearance on the property

Additionally, though the previous co owner of the house had given us a quit claim (no animosity, just someone who had helped who was no longer helping), I think the record got screwed up so we had to do a fresh one.

I spent a few days sitting in the lawyers office, taking up their conference room (so I could work remotely), waiting for papers to show up & get signed & dealt with, but I was hopping mad at the bank who had effed this all up & wanted it fixed ASAP.
posted by tilde at 4:30 AM on September 5, 2012


Are you financing or refinancing?

Refinancing.

What's the mess related to MERS?
posted by Gordion Knott at 4:38 AM on September 5, 2012


The mortgage had been on our property for years, & the title "blipped" when we refinanced, but all the banks ignored it until it was time to sell.

I think the mistaken/fraudulent(?) mortgage was filed through MERS.
posted by tilde at 5:17 AM on September 5, 2012


I do refinances for banks all the time and see stuff like this *all* the time.

" Strange, unresolved judgments that the bank suggests 'relate to another person with a name similar to yours.'" happen ALL THE TIME, especially if you have a very common name. Usually the bank should accept an affidavit stating that you have not had any judgments filed against you and that you are not the person referenced in the instance that came up on the title. (This method will also work with bankruptcies.)

"Old loans that were paid off years ago. Delayed payments on taxes that were resolved. Loans taken out by a previous owner" show up because the proper releases/discharges/satisfactions were never recorded in the County Clerk's Office*.

This is the one that is a total PITA, especially when the mortgage is (a) an older one and (b) with a bank that has been merged out of existence. Your attorney* has to figure out who (law firm, individual, whatnot) sent in the payoff check for that mortgage, contact them, ask if they have proof that it was paid off, ask to be sent that proof, contact the bank (or whichever bank it was merged into), fax off all this information, wait an insane amount of time, discover that the bank never received the fax so you have to send it off again, and there's lots of swearing and annoyance.

SOMETIMES the title company will accept "here's a proof that the mortgage was paid off but we don't have the discharge yet will you PLEASE clear the title and we PROMISE we'll get the discharge recorded", sometimes they won't.

So, to answer your questions:

1. Is it common for title searches to show irrelevant information like this? Yes, because in the title company's mind, it's not irrelevant.

2. What do banks expect from a homebuyer to remedy the mistake? Proof that the information in the title search does not apply to you.

3. Will a simple answer like "that's incorrect" or "this doesn't apply to me" be sufficient in most cases, or will there be instances in which banks request more paperwork? For judgments and bankruptcies that are not you, an affidavit should be acceptable. Outstanding old loans will require the satisfaction to be filed. (Very, very, *very* old mortgages [at least 40 years since the last payment] might be able to get resolved with what's called an Ancient Mortgage Affidavit, but that's rare)

4. If so, what's the best way to build a case showing that the information is irrelevant, and that the title is clean? Since you're refinancing, get every bit of paperwork you have from when you bought the house. See if you have any documentation regarding any mortgages held by the previous owner. Contact whomever represented the previous owners when they sold the house. Get them to get the discharge.

Or, y'know, lawyer up.
-----------
*Or the Recorder of Deeds, or whomever handles land records in your jurisdiction.




tilde: which bank were you "hopping mad" at? If it was the bank that ordered the title and requested all this stuff, your anger was misplaced.
posted by Lucinda at 5:31 AM on September 5, 2012


Lucinda - at first, I was upset at everyone who had refinanced us over the years (mostly the entity now known as Wells Fargo) who ignored this "blip". But they weren't involved in the final transaction.

The mortgage for someone else on our house was sold by the entity formerly known as WAMU ("eff uppers of record") who at first wouldn't speak to us because our name wasn't on the mortgage they'd put on our house for someone else (the culprit was a transposed lot number). I eventually somehow proved it was our house and just asked that they provide a letter that mortgage number xyz123eiown3201ish was not on our house, and that there were no liens on our house from them.
posted by tilde at 5:41 AM on September 5, 2012


Is it common for title searches to show irrelevant information like this?

Yes. Extraordinarily so. Title records go back upwards of a hundred years--more in some places--and the number of legal transactions that can accumulate over that period of time is pretty immense.

What do banks expect from a homebuyer to remedy the mistake?

From the homebuyer? Little. From the homebuyer's title agent and lawyer? Depends on what the issues are. But this is why title insurance exists.
posted by valkyryn at 6:11 AM on September 5, 2012


What do banks expect from a homebuyer to remedy the mistake?

Generally it's title companies that deal with title stuff, and the current owner would be dealing with it as they are the entity claiming that they have the right to sell the property to you.

As the buyer, if you have to build a case that the seller has clear title -- well, if you aren't able to buy title insurance on the property I'd be very suspicious of this deal.
posted by yohko at 11:43 AM on September 5, 2012


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