Selling a home can be one of the most stress filled events encountered by someone in their lifetime.  You're parting not only with a "four walled structure".....but rather a "home".. filled with years of special occasions, a timeline of dreams, and endless fond memories.  The emotional wherewithal is no doubt unyielding.

After you initiate the contractual process, and engage the inception of "legal jargon" associated with effectuating the sale.....you come to learn mid way through said process, that a review of your title report reveals a handful of your prior mortgages still showing "open of record"....loans that you took out, and subsequently/supposedly paid off and satisfied years ago.  Loans that were originated with Lenders that are no longer operational or in existence.  In short, loans where "Satisfaction of Mortgages" were never recorded.  

Title to the home is now clouded by these encumbrances, detrimentally affecting marketability.  Your ability to sell is now strained.....significantly delayed....and directly contingent upon you procuring said satisfactions from Lenders that are no longer in business.  The emotional roller coaster ride of home selling is now "stuck on panic".  So...what can be done?

Lenders can be held legally responsible for unreasonable delay and/or failure to timely record a formal satisfaction of mortgage, once payment in full has been received.  They can even be held liable for one's legal fees in conjunction with a lawsuit against same Lender for failure to remove the paid lien from record.  Nevertheless, in most of these scenarios, the Lenders that were the custodian of the "unsatisfied" loans... are now defunct, out of business, or no longer operational.....so there is no one to sue. An alternative option(s) must be validated.

Fret not; there is hope.

Your attorney must invoke a superior level of due diligence...ascertaining who the "successor lenders" to these now defunct mortgagees are; hoping to obtain mortgage satisfactions from them.  Contacting the New York State Banking Department is a good place to start; as they are in a position most suitable to advise as to who "took over" for the now "non-existent" lender/bank.  In addition, correspondence with a competent Title Insurance Company is crucial; as said company should be able to assist in "clearance" of these mortgages by obtaining prior "evidence of payoff" for said loans.  Lastly, if you as the homeowner have any documentation evidencing payoff of any of these loans....be sure to be forthcoming with same.  As a rule of thumb, ALWAYS keep any correspondence from any lending institution that you pay off.  This documentation may be your saving grace should you ever be placed in this precarious predicament.

In summation, when selling your home, choosing the right real estate attorney, and having the right Title Company in your corner can help facilitate and finesse unforeseeable situations....that but for duly competent representation......could you have you thrown in to an emotional frenzy.

DISCLAIMER: THE CONTENT OF THIS POST IS FOR INFORMATIONAL PURPOSES ONLY AND NOT TO BE CONSTRUED AS LEGAL ADVICE. NO ATTORNEY/CLIENT RELATIONSHIP IS CREATED BY SAID CONTENT. BE SURE TO CONSULT AN ATTORNEY REGARDING ANY/ALL OF YOUR LEGAL QUESTIONS AND/OR CONCERNS.