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Old 11-19-2010, 10:40 PM   #41
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Can someone explain this "lien release" stuff? Is there ordinarily a lien in connection with a mortgage? (I'm just wondering if I should have gone through some legal maneuver back in 2004 when I finished paying off my mortgage to a private lender.)
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Old 11-19-2010, 11:11 PM   #42
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Assuming your mortgage was filed of record in the courthouse, a lien release would be required in order to pass clear title at the time sale. Ordinarily, this process is automatic to the lender/servicer and no action is needed on the part of the borrower (it is also a matter of law/state statute). You can always go to your courthouse and check to see if the lien was properly released.
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Old 11-20-2010, 12:38 PM   #43
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Assuming your mortgage was filed of record in the courthouse, a lien release would be required in order to pass clear title at the time sale. Ordinarily, this process is automatic to the lender/servicer and no action is needed on the part of the borrower ...
Thanks. Since the holder of my mortgage was just a person, the previous owner of my house, I'm not sure he would know what special to do, if anything, when I finished paying off my mortgage back in 2004. Following your suggestion, I located where to find whether "a lien is attached to an exisitng, recorded deed", which turns out to be the Hawaii State Bureau of Conveyances, and searched their documents. I found the mortgage and the deed, but that's all -- no reference to any liens. So, I guess it's okay. But I can't say I understand the relationship between mortgages and liens.
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Old 11-20-2010, 01:30 PM   #44
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But I can't say I understand the relationship between mortgages and liens.
A mortgage NOTE is the loan document that spell out the interest rate and other terms (like a bond).

A mortgage LIEN is something filed at the courthouse to say that you owe someone money, and the loan is secured by the real estate, and so you can not sell the property until the LIEN is removed.

Naturally the LIENHOLDER will not release the LIEN until the NOTE (loan) is satisfied.
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Old 11-20-2010, 02:26 PM   #45
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Let one of our esteem lawyer members weigh-in, but it has always been my understanding you want a formal release from the mortgage holder. It can be as simple as writing across the original mortgage "paid-in-full" and dated which you will then want to record. This "release" removes any possible cloud on your title and will make any future sale much easier.
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Old 11-20-2010, 02:43 PM   #46
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... It can be as simple as writing across the original mortgage "paid-in-full" ...
After he got my last mortgage payment, the previous owner sent me a bouquet of protea with a note saying "Thanks." I no longer have the protea or note.

I found there is a fee of $25 for recording a "Satisfaction of Mortgage". I wonder if that is an acknowledgement that the mortgage was paid.

Google yielded this: "A Satisfaction of Mortgage is a document signed by a mortgagee acknowledging that a mortgage has been fully paid and that the mortgage is no longer a lien on the property. In order to clear the title to the real property owned by the mortgagor, the Satisfaction of Mortgage document must be recorded with the County Recorder or Recorder of Deeds."

So I guess the mortgage is a lien on the property, and I had better arrange for a Satisfaction of Mortgage to be signed and recorded.
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Old 11-20-2010, 04:26 PM   #47
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Yes, a mortgage is a lien. It secures your property for repayment of the note. If you have paid the loan in full you will definitely need to secure a lien release, satisfaction of mortgage, mortgage release, deed of release (it is known by any number of different names depending on what state you live in). Only the holder of the mortgage (the person/entity you borrowed the money from) can release the lien. You will need to contact that person/entity and request that they file the release assuming they filed the mortgage to begin with (if it was never filed, there is nothing to release). I would take care of this sooner rather than later.
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Old 11-20-2010, 04:42 PM   #48
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... contact that person/entity and request that they file the release ...
I'll do that. Thanks for the advice.
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Old 11-20-2010, 04:51 PM   #49
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Old 11-21-2010, 09:02 PM   #50
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I would sent them a check for the payoff less 2 cents. Then perhaps if I was in a fiesty nood I would send then a check for 1 cent the following month.

Then sit back, eventually they will come to you and beg you to payoff the loan.
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Old 11-21-2010, 09:04 PM   #51
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Then sit back, eventually they will come to you and beg you to payoff the loan.
Or foreclose.
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Old 11-22-2010, 01:55 PM   #52
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Or foreclose.
"The bidding starts at one penny..."
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Old 11-22-2010, 09:23 PM   #53
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I would not recommend that you try to screw around with your mortgage company. Most mortgages are held by very large, very impersonal companies. Their systems are automated. If there is an active loan sitting on their books with even a .01 balance and no payment is made, that loan will be reported delinquent to the credit bureau. Is it really worth risking your credit to screw around with a company that really doesn't care and you really aren't hurting?
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Old 11-23-2010, 08:18 AM   #54
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Or foreclose.
Get real REWahoo. Long before they initiate foreclosure proceedings they would need to contact the borrower. They would probably take a penny out of their pocket and settle it just to get it off the books. I would have back in the day when I ran a residential mortgage servicing operation - and would have smiled at the borrower's imagination - it would have made my day.

Let's say they did foreclose - I would love to see what the judge would do if they brought a loan with a 1 cent balance to foreclosure court. Can you imagine?

The point is that the bank is being wholly unreasonable in requiring a certified check to do the payoff. If they can show the borrower where the terms of the loan require a certified check, then fine, otherwise they have no right to make such a demand even if it is their "policy".

Actually, the paydown to a minimal balance for a period fo time would minimize the risk to the servicer/lender from a bigger check that is returned that MissMolly explained.
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Old 11-23-2010, 08:27 AM   #55
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Get real REWahoo.
I see your humorectomy was successful.
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Old 11-23-2010, 08:38 AM   #56
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My story. About 10 years ago I had finally had it with our mortgage company (another story) and went to our bank and opened up a HELOC. I told our bank I wanted to pay off our mortgage. They said no problem and offered to contact our mortgage company and get a payoff amount and wire the money to the mortgage company. They did all that - no problems. A year later I decided to pay off the HELOC and went back to our bank and asked for the exact amount to pay off the HELOC and wrote them a check on the spot (from our checking account with that bank). They miscalculated and I overpaid by 1 cent. This stayed on their books for two years until we went to sell the house. The title search did not come up clean because the bank owed us 1 cent. It took 3 visits to the bank to get them to release the lien even though they owed me money. If the balance had been zero it would have not been a problem but the fact that they owed me money was an issue that nobody seemed to know how to fix. I even offered to let them have the penny ;-)



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So I had enough cash laying around to pay off the mortgage. Called Chase Finance to find out how much would pay it off and they gave me a quote and advised I send my payment to X address. So I did, feeling good about paying it off. Low and behold they send the check back to me. They claim that I have to get an official payoff statement and send them a "guaranteed" check. I tried to explain to them that this isn't like I am selling a house and need them to release a lien by a certain date. They can wait until the check clears for all I care. Morons admit I can pay principal down to $1, but claim the last payment (e.g. $1) has to be a guaranteed check.

I pitched a huge fit but it was wasted on the low level customer service rep. Has anyone else encountered anything like this?
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Old 04-30-2014, 08:40 AM   #57
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I did not reply to this back in 2010 but here is my quick, uneventful story.

Back in 1998 after I had paid down large chunks of my mortgage in 1997, I decided to pay down the remaining balance of about $6,000. One phone call to the mortgage company and the friendly rep told me I could simply change the amount of the automatic, electronic payment from its typical monthly amount to the payoff amount. All I had to do was to fax them a letter giving them permission to do this. I did just that about 10 days before the end of the month and everything went fine. About a month later, I received the documents including the original stock certificate (I am in a co-op). I had to file a small form with the county clerk's office after that but no big deal.
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Old 04-30-2014, 10:24 PM   #58
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They ask for a certified check because they don't want to deal with a bounce/stop pay on a personal check once they start the lien release process. People like to jump the gun on banks and how stupid their policies are but a lot of these things are in place for a reason.
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