Thursday 25 September 2014

Parents built their house in NJ almost 25 years ago. Throughout the years their mortgage has been packaged and sold to other banks. This yea...

Question

Parents built their house in NJ almost 25 years ago. Throughout the years their mortgage has been packaged and sold to other banks. This year they sold their house. During the closing a title search was done and it showed a lien from 2001 from a bank that sold the loan to another company (and after that it was sold again and again). The company that SOLD the loan never filed the paperwork showing the loan paid when the next company bought it. No other company ever raised the issue as it kept being bought/sold/transferred. Now they find out the company isn't in business any longer either. The buyers of the house agreed to move forward putting that amt of money that says it has a lien in escrow. My parents are going in circles trying to figure out what to do. Their real estate lawyer is trying to help but not getting anywhere really. Any thoughts?



Answer

If your parents have not had success finding a company that will file a satisfaction of mortgage on the original debt, they may have to file an "action to quiet title" in Superior Court. However, the issue is not with the company that sold the loan but rather with the company who holds the note now or held it last. If the note and mortgage were sold together (as is almost always the case), the new company becomes responsible for servicing the loan and for issuing the mortgage satisfaction. There should also be a public record of the assignment to each new lender as the loan is bought and sold. Your parents' lawyer probably knows all that and is trying to solve the problem without getting it too messy. However, in the end, there may be no easy way and there may have to be a suit.

See also: http://info.corbettlaw.net/lawguru.htm



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