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Helpful hints for making your refinancing WORK!!

19, August, 2014

You just finished your refinance. You could not be happier. You shortened you loan term and lowered your rate. What could be better? Little did you know that the closing you completed would prevent the timely sale of your home. If you had just chosen an attorney to do your refinance that knew what he or she was doing. When you refinance, you pay off off your existing loan. The loan was held by Big Bank and serviced by Mega-Servicer. The attorney that closed the loan sent your payment to Mega-Servicer and received a discharge. The discharge was then recorded at the registry of deeds. This process is completed thousands of times every day, but there are hundreds of things that could go wrong. What would happen if the refi-attorney that received the discharge did not check it before sending it to be recorded. The discharge was executed by Mega-Servicer but your loan was held by Big Bank. The discharge that was recorded is ineffective and the mortgage that was paid-off at your refi is still outstanding of record.
You are now selling your home. The closing attorney contacts you to let you know that your mortgage has been improperly discharged and a new discharge has to be obtained and recorded. The buyer is requiring that you convey good marketable title free from all liens; your paid-off mortgage is still a lien. What are you going to do? The terms of your purchase and sale agreement may allow you to continue the sale for 30 days but now you cannot buy your new house because you were relying on the money from the sale of your old home. You may not be able to resolve your title issue within thirty days; maybe your buyer will walk.
Total panic sets in. You may be defaulted under the terms of the agreement to buy your new home. You could lose your deposit. The dominoes that were supposed to be falling in such an orderly fashion are now stuck behind your improperly discharged mortgage. What if Big Bank has been merged or has been taken over by the FDIC. How will you get the discharge and how long will it take?
This all could have been avoided if the closing attorney that did your refi knew what he or she was doing. Take the time after your refinancing transaction to check with the closing attorney to see if your old mortgage discharge has been recorded. Ask for a copy of the Discharge and the Book and Page where it is recorded. It is much too late if you leave this step to the last minute!! Think ahead. I will help you with if I have your listing, rest assured of that.