Got a question on a title search I had done on a property - a deed of trust (for $15400) dated 1995 does not have a recorded release. How big a problem is this, can a title company typically get this cleared with it being so old, and will title insurance be available for the property? I think it was a 10-year note, due in 2005, so perhaps there might even be a 10 year limitation on any claims? Any opinions appreciated.
@Ryan K. :
Ryan, I have seen this before and haven't had a problem resolving the issue. This is of course under the assumption that the deed of trust was paid off and the recording had just failed to take place. Ask the Title Closer you work with to contact the necessary party to help resolve the issue. Since it will most likely be a requirement of the Title insurance policy, closer will handle the situation accordingly. They will probably need information from the seller pertaining to the DOT and personal information to clear this up. Barring some unforeseen issues, this should be pretty simple. Best of Luck!
Thanks Stuart. A little more info - the owners apparently passed away recently (both of them), and the bank foreclosed , which was recorded. Deed of trust was with Chevy Chase Bank in 1995. I assume the title closer can get in touch with the bank, or predecessor, to get the release then and clear the title? I'm somewhat of a newbie to this area of titles/deeds but learning as I go along.
@Ryan K. :
Is this a Short Sale? Is this being purchased directly from owners or through brokers?
Its an auction property. US Bank foreclosed about 30 days ago.
Ryan, I would imagine that in order to sell this property they would have had to resolve with a second mortgage if it existed. Have you asked your closer potential issues that might stem from this? I guess in other words have they seen a properity purchased through auction, that had a deed of trust still attached to the property? Is this County Auction or auction.com?
Its through Homesearch.com. I doubt the title closer has dealt with many auction properties, but i can ask to get their advice and opinion. From my searches and reading about the homesearch auctions I haven't heard of any issues with title, but you never know so I'm just trying to cover all bases so no surprises pop up if I'm a high bidder.
If it's an REO, they will have to resolve it, to give you clear title. Use your title co., or make sure it's not an exception in the B section of the title commitment/policy.
If there was a first lien foreclosure, there will not be a 'release' recorded on any liens because these liens (the first and subsequent) are uncollectable (assuming you have a valid and enforceable foreclosure per your state laws) due to the first lien foreclosure.