We love sharing real-life examples of how our services saved our clients from horror stories, especially in time for Halloween. We all know there are tons of things that can go wrong with a closing, even after it’s over — it’s a spooky thought.
To explain this story, we have to make sure you understand what release tracking is. Usually the title commitment reveals instruments (like mortgages or HELOCS, judgments, Lis Pendens, or UCC statements) that need a subsequent instrument recorded (like a satisfaction or release). When a client uses us for release tracking, they’ll typically order it for every closing so we can track those instruments to make sure they really were recorded post-closing. And if they’re not, then we resolve the issue if necessary.
A little while back, we came across a title commitment that required a Home Equity Line of Credit (HELOC) to be satisfied. In Florida, the bank has 60 days to record satisfactions and when it was time to follow up, we found that the release of the HELOC had never been recorded.
When a client, like this one, has us handle all their release tracking, we do post-closing resolution at no additional charge. We got to work on trying to solve the issue. Through a little sleuthing we realized that the account termination authorization had, in fact, been faxed to the bank — the bank acknowledged they had received some fax, but somehow the termination authorization was nowhere to be found. In turn, the bank never sent the proper documents to the County Recorder in order to record the release in the public record and that line of credit was left wide open and would have stayed that way, potentially causing a world of headaches for the new homeowner, title insurance company, and title agent — had we not caught it.
This scary situation is just one of many potential issues that could arise if a title agent or real estate attorney isn’t tracking the recordations of all the releases, satisfactions, reconveyances, or any other instrument listed in the title commitment. While this situation may only occur once in a full moon, you and your team should be prepared to handle this kind of ordeal with written procedures that follow the American Land Title Association’s best practices related to tracking mortgage satisfactions and releases.
Resolution for this unsatisfied HELOC takes more than just a simple phone call. You can bet our client is happy they don’t have to deal with the issue. The truth is that these scary mishaps occur all too often, and they’re all too preventable. This client of ours was incredibly grateful that the issue was caught before it became a real problem. We’re glad they recognized that with so much to do, they don’t always have the time or remember to follow up. That’s what we’re here for — to save them from those monsters lurking beyond the closing.
