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Refinancing despite unreleased Mortgage?
Old 05-04-2015, 09:04 PM   #1
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Refinancing despite unreleased Mortgage?

In settling my father's estate, I performed a cursory "title search" via the county's web site. Dad had a total of 4 sequential mortgages on the property but I could only find 3 mortgage "discharge" entries. The odd thing is that it was the original mortgage that was never discharged. FWIW - this mortgage was assigned to a second company immediately.

It is possible that I am using the system incorrectly and I plan to visit the courthouse tomorrow and investigate further.

Does anyone see a way that future mortgages/refinances on the property could have been obtained without the original mortgage having been released?

Is there some way that the mortgage could have been released but without the grantee matching my fathers name? The simple free interface that I am using at home only allows search on grantor/grantee names and type of document recorded.

Thanks for any information that you can provide.

-gauss
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Old 05-04-2015, 09:13 PM   #2
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Or it could have been released and just never filed...

I got a release on my mortgage and never filed it.... they wanted ME to pay the money to do it... was forced to do it when I sold the house...

It is a surprise that he was able to get another mortgage without the release, but they might have had something in the file saying they were not due any more money... a lien is only good if you owe them something...
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Old 05-05-2015, 10:34 AM   #3
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Well I went to the county today to continue my search on the public access full computer system. No luck in finding a mortgage release. I then payed the $5 to have the counter clerk perform a search. She couldn't find it either.

I guess at this point, I will approach the bank who was assigned the mortgage.
Failing that I believe there may court proceedings available to discharge the mortgage.

I guess the only remaining question that I have is:
Will I be able to legally transfer ownership of the property from the estate to the devisee with the mortgage intact? Obviously I can draft a deed, have it notarized and submit it to the recorder. I do not know if they will be able to accept it with the outstanding mortgage.

Perhaps stated differently, does a mortgage prevent a transfer of ownership of property, or does it just discourage it when new lenders, title insurance companies and arms length buyers are involved with the transaction?

Thanks
-gauss
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Old 05-05-2015, 11:25 AM   #4
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This happened to me a while back, I was able to get a discharge by going to the bank that originally held the mortgage when I refinanced (actually, the bank that bought the bank, that bought the bank, that bought the bank that held the mortgage) They were able to see that I did not owe then anything and gave me a discharge. I do think it cost me $50.

Also, a mortgage does not prevent the transfer of ownership of a property... But, a transfer of ownership will probably cause a payment in full of a mortgage. And, if there is a non-discharged mortgage you may have an issue getting a mortgage on the property.
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Old 05-05-2015, 11:34 AM   #5
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A " Deed of Reconveyance" or release will specifically include info on the original deed of trust (lien) , like date when executed. They often do not get properly recorded.It would be a good idea to have the document, even if the former lender charges for it.

A quick chat with a probate atty might be advisable, also because how title is done on estate distribution may have property tax implications.
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Old 05-05-2015, 01:26 PM   #6
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I had a similar issue recently. In this case it was stated that a specific title company had rather suddenly gone out of business in the 2004/2005 real estate blip leaving "rooms full of documents that were never filed". While I find this rather amazing, what was really amazing was my current title company who "have a team" who research these and get them released. The release is via a mechanism that is unknown to me. However it did work.
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Old 05-05-2015, 06:04 PM   #7
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Quote:
Originally Posted by Lakewood90712 View Post
A " Deed of Reconveyance" or release will specifically include info on the original deed of trust (lien) , like date when executed. They often do not get properly recorded.It would be a good idea to have the document, even if the former lender charges for it.

A quick chat with a probate atty might be advisable, also because how title is done on estate distribution may have property tax implications.
Hi Lakewood,

Thanks for the suggestion. I have actually spoken to 2 Probate attorneys (1 at the beginning and another under my prepaid legal service plan) and this topic did not come up.

You are talking about local property taxes (ie those that normally fund schools etc), not estate tax, capital gains tax, estate income tax -- correct?

I have already notified the local taxing authority about the death and they have updated the status to remove the Primary Homestead property tax discount that applies in our state.

I guess the one area that could cause trouble is in my state property tax values/increases are capped at inflation until a sale takes place.

-gauss
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