This week's Title Tip discusses the use
of Certificates of Release by a title company to release a
mortgage paid off at closing.
As a title company, it is our responsibility to issue a Loan
Policy and an Owners Policy of Title Insurance after closing and disbursing
on a new loan. Before closing we request a Payoff Letter from the prior
mortgage holder, and based on that letter, we disburse funds from closing to
payoff the old mortgage. Historically we would not issue the Loan
and Owners Policies until the prior mortgage was properly released and
recorded in the County Recorder's Office. However, in some cases title
companies would issue the policy relying on proof of payoff in their
closing file. Of course, as was often the case, a new transaction
would occur sometime down the road, and that old mortgage would show up on
title as an open lien. I'm not pointing fingers here, but sometimes
those releases of mortgage never made it from the lender to the Recorder
of Deeds, causing delays with new closing as the new title
company worked to get a "Hold Harmless Letter" from the
title company who closed the prior transaction. Getting a Hold
Harmless Letter from the other title company was sometimes a frustrating and
time consuming project, especially if records were stored offsite, or if the
old title company was no longer in business. If the Hold Harmless
Letter couldn't be obtained, the new title company would have to track down
the old lender to get the required release.
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Did you know that lenders and home buyers now receive their title policies at the closing table? Call Michelle Null, VP Escrow Operations, to learn more about this exciting new program.
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Kim Adams joined Benchmark Title nearly three years ago, in September 2004. She serves Benchmark's customers as Receptionist and "Director of First Impressions" in our main branch in Shiloh, IL. Before venturing into title insurance, Kim spent many years in retail management and the health insurance industry, though she declined to say exactly how many years. Kim says her favorite thing about her job is the part she plays in making your experience in our office as pleasant as possible, and suggests your experience would be even more pleasant if you remember to bring two forms of ID to closing. Kim resides in Belleville with her husband, Len. She has two children, Megan, 28, and Joshua, 24. She can be reached at 618-239-3750 or by email at email@example.com.
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