Unreleased Liens

When you have a second mortgage and the balance is zero, and you sell the home, please make sure you have a release for it! Title companies d0 their diligence to clear liens, but as a seller, you may also want to contact your bank to make sure you have the release. I have seen settlements where the second lien was never released and that would hold everything up.

This is especially the case on second mortgages that are a few years old. They have been sold multiple times, because banks keep buying each other out, or because they get filed away because of a certain period of time. If they are at least 2 years old, the current bank may not have the liens information readily available, and it would require them to be researched, worked on, and cleared. That will be impossible to do if you inquiry at the time of settlement. If the lien is not cleared, the title companies will require for the seller to put the amount of money of the second mortgage in an escrow until it can be verified that it has been released.

Documentation is REQUIRED, even if you could get a verbal confirmation over the phone; it will not be enough for the title company release all of the proceeds. The biggest misconception sellers make is thinking that because they have a zero balance on the second mortgage, it has been automatically released. Please take the time early in the process, and contact your bank to request a copy of the release.

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Montgomery County Homes