Hidden Mortgages?
Hi:
I'm trying to determine the equity on a property where the owner was served an LP.
I found 2 mortgages, both were assigned and both were SATISFIED.
The LP was served by MERS on behalf of GMAC. From there the mortgage that the LP was served against disappears.
I can't find any records of the mortgage at all.
Is it legal to write a mortgage/note on real estate and NOT record it?
If there was no LP I would never have known about this mortgage. I still don't know how much it's for.
How is one to successfully do a title search then? How can you know how much money is owed on a piece of property and by who?
To ensure marketable title, a title search should be performed. A title search is a process where someone searches the public records in the city or town where a piece of property is located.
The searcher will go through the grantor and grantee indexes and examine the documents recorded in the land registry concerning a particular piece of property.
A title search generally includes mapping a chain of title by examining all the recorded deeds concerning the property. A chain of title is established by determining that the present owner received valid title from the prior owner, and the prior owner received valid title from that prior owner on down the line for a certain number of years. The title searcher will determine if there are any encumbrances on the property, such as mortgages. If there are no encumbrances, the title is "good and marketable."
During a title search, several key things are examined. For instance, mortgages, real estate taxes, liens for sewers, roadways, sidewalks, and other municipal improvements, federal taxes, government claims, legal judgments, foreclosures, condemnations, covenants, and easements.
After a title search is performed, title insurance can be purchased to protect against anything that might have been missed. Title Insurance is a contract between the insured and a title company.
Under the terms of the contract the insured agrees to pay a premium and the Title Company agrees to defend the title or pay losses the insured may suffer if the title is challenged or defective. Title insurance basically protects against defects such as prior fraud or forgery that might go undetected until after closing and possibly jeopardize ownership.
After title has officially passed, in most states, the deed must be recorded at the Registry of Deeds. Recording the deed officially establishes ownership and provides notice to others that you are the owner.
is LP Lis Pendens?
it is legal to write a mortgage and not record it although that's not too smart. Recording documents is your 'notice to the world' regarding this piece of real estate.
I'm not sure I follow but every Mortgage recorded should have either a satisfaction or an assignment. otherwise, it appears to be a valid mortgage.
perhaps the title company for whatever reason never recorded a new mortgage and the lender filed the Lis Pendens quickly to protect their interests - while they try to find out why their current mortgage wasn't timely recorded
Thanks for your reply:
I basically understand what a title search is.
I'm trying to track down specifically how much is owed on the property, including mortgages, taxes, leins, etc.
While searching records I've found numerous cases where a Lis Pendens was served on a mortgage that I can't find. In my example case (above) I found 2 mortgages and 2 satisfactions but neither was the mortgage that the Lis Pendens was being served against.
I'm for all records in the given county on the Lis Pendens Grantee's name. The mortgages are not showing up.
My question really was, 'How can this be?" or "How can I find the hidden mortgages?"
Yes, sorry, Lis Pendens.
If it's legal to NOT record a mortgage or a lein, how can we perform a complete title search?
Couldn't there always be a hidden mortgage out there that no one knows about?
You need to look at the book and page number of what document the Lis Pendens is affecting, it sound as though you are only doing a computer search, you will need to go to micro film along with a search in the deeds book.
Go to http://weirei.tripod.com/mentorbooks/titlesearch.pdf
and down load this guide on title research as it my help in the process.
_________________
John Michael
Success one deal at a time!
[ Edited by JohnMichael on Date 10/11/2004 ]
recording is all about timing and that creates lien position. if someone didn't record their mortgage until after a property was sold, their lien would not have been perfected and therefore, unenforceable. they'd have to then sue the borrower on the Note.
if someone took out a first mortgage for $100,000 and then a month later got a HELOC for $20,000 and the first lender hadn't timely recorded their mortgage, the HELOC lender would be the first lien holder.
when I started working a few short 30+ years ago, we truly ran down the street to the court house after a settlement to record the deed and the mortgage - it was ALWAYS recorded the same day as the closing, unless it was after hours and then we were in line at 8:30 a.m. the next day. now, it sometimes is weeks until things are recorded and that is very dangerous but a danger lenders and title companies accept.
Again, I'm guessing somehow a new mortgage that replaced the satisfied ones you found was never recorded and the lender filed the Lis Pendens to cover themselves until they can get their mortgage recorded.
as a loan closer, I am sometimes asked to make corrections on mortgages that are up to 2 years old - I've had 3 of them recently that were causing huge problems because they weren't recorded within an acceptable time period (p.s. - recording isn't my job - someone else does that)
Thanks for the Reference to the doc. I'm not finished with it yet but so far it's very helpful.
So, I'm to understand that if I buy a property, and there was a mortgage on it that has NOT been recorded but also has not been satisified, the grantors cannot come after my property to collect?
in my state, there are certain statutory liens that don't show up but that you have indications they are there - such as inheritance tax & child support.. I think if a mortgage isn't recorded, you' generally be safe but, before I'd spend any money, I'd contact a lawyer to be sure. in this case, there is something filed indicating they have some type claim on the property.
OK, I think I understand.
You've mentioned a couple times now that you thought they might have recorded the LP just so they could record some claim on the property before they could record the mortgage.
I'm guessing that it's a lot easier to record a Lis Pendens than a Mortgage, or at least in some cases?
So, if I bought the property and they had filed a Lis Pendens, even if the mortgage isn't recorded they may have a claim anyway? Hmm, now that's food for thought.
and that's why I think you'd need a lawyer. will the LisPendens sufficiently hold the lender's lien position.
and, to answer your question, filing a LisPendens isn't easier than filing a mortgage but if you don't have the original mortgage (original is lost, not signed correctly, etc) getting borrowers to resign isn't always the quickest thing to do.
Probably you've already sorted it out by now, but filing a Lis Pendens may be cheaper than filnig a mortgage, since mortgage recording usually requires deed tax on th amount of the mortgage and Lis Pendens may just be another recorded document.
"Lis Pendens" may not refer to a mortgage at all. In my state, Lis Pendens are typically used in quiet title actions, and mortgage defaults are filed as Notice of Pendency. Maybe we should all study Latin...
I'm sure I'm not answering your question but I have an interesting story that may relate...
I'm a Realtor who lists REO properties. Got a call from an asset management company who stated they needed an occupancy check. I was told that the house had been sold, someone missed this company's mortgage, and they have foreclosed. She said the owners wouldn't go lightly as they "believe they own the house". I checked occupancy, of course they were still there. Asset mgr said she was starting eviction so we could get the property listed.
Just out of sheer curiousity, I pulled my own title search. How interesting when I saw that the mortgage that they foreclosed (ALL THE WAY THROUGH THE PROCESS) had been satisfied nearly 2 years prior to them foreclosing. Now, I'm just a measly little Realtor, and I could see that the mortgage had been satisfied and the satisfaction filed twice - on 2 separate dates. The bank that assigned their mortgage to the company that foreclosed sold their loan AFTER IT HAD BEEN PAID OFF!!
Needless to say I reported back to my contact that um, you'd better look again before you go evicting people, and I sent her my title search copy, and low and behold not only did they buy a mortgage that had been satisfied, but they went through the entire foreclosure process on it! Don't you think SOMEONE (anyone, maybe the ATTORNEY who foreclosed the loan???) would have caught this?
Moral of the story - a good title search doesn't lie. Banks and attorneys DO make mistakes and even foreclose when they really can't. Pay a title company to do a title search and/or commitment and if it's good, have no fears.