Zombie mortgages

Zombie

ZombieZombieIn our office, whenever we open a new sale file, the first thing we do is a quick title search on the property. While this isn’t legally necessary, as the buyer’s lawyer will eventually do a full title search, we have found it to be extremely useful because sometimes, mortgages stick around far longer than their useful shelf life.

For example, I had clients who were selling last year. When they bought the house in 1985, they had gotten a small mortgage of $5,000.00, which was paid off about two years later. However, it was never removed from title. They had paid it back, so the lender wasn’t looking for money, but it was still sitting there and they now had an obligation to remove it for the buyers. This was made more complicated by the fact that the lender had been purchased by another company, and then that company purchased by a third company, so we were looking for a discharge from a company that didn’t know a thing about this file. The title search from the buyer was due about a week before closing; it took us five weeks to track down the lender and get the mortgage discharged. If we had waited for the buyer, it would have thrown off the entire sale – which was necessary to complete their purchase the same day.

Sometimes, a little extra research and a very small cost is worth it to save the stress later.

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