Post-Closing Due Diligence

Release Tracking is usually performed by a title professional after a real estate closing, but it’s only one small part of post-closing responsibilities. Voluntary and involuntary liens like mechanic’s liens, Home Equity Lines of Credit, mortgages, and judgments require an official release or satisfaction to be filed by the lienholder in order to issue marketable title insurance policies. Unfortunately, not all parties are aware of their responsibility to file the release, or sometimes a document is rejected by the recorder. 

If a lien isn’t properly released this results in a defect, or cloud, on the new owner’s title.

 

What Documents Are Tracked After Closing?

Liens are never “erased” in the public record. Instead, a document is recorded with a number corresponding to the original lien once it’s paid off. For every lien document that’s recorded, a subsequent document must be filed to release that lien. 

 

PropLogix tracks all instruments listed in the Title Commitment and offers post-closing resolution for FREE.

 

Here are some examples of the common documents found in a title commitment and their corresponding releases our Lien Release Department Tracks:

Instruments Listed in Title Commitment:

  • Mortgage
  • Deed of Trust
  • Home Equity Line of Credit (HELOC)
  • Judgment Liens
  • Lis Pendens  
  • UCC Financing Statements
  • Notices of Commencement

 

Subsequent Documents:

  • Satisfaction 
  • Release
  • Termination 
  • Subordination

 

Title Agents Turn to PropLogix for Post-Closing Help

In order to protect a homebuyer’s property rights, it’s important to track these documents after closing. This follow-up search is often referred to as a “continuation search.” This is usually done before or when the title insurance policy is issued. 

Best practices suggest issuing the policy within 30 days of settlement (the closing date) or when all of the commitment requirements have been met. 

Unfortunately, title agents have no control over when or whether the document is properly recorded. Some states have statutory time frames for the public recorder to enter the documents into the public record, but some don’t. There’s also no guarantee that the documents will be recorded. It’s estimated that 10 million documents are rejected by county and city recorders every year. Despite the advent of e-recording, which helps reduce rejections, not all recording offices offer this option. 

Additionally, settlement agents face pressure to issue policies before the statutory time frame that requires the documents to be recorded. In order to meet these expectations, some agents issue policies in the hope that post-closers won’t miss any documents in a continuation search or that a mutual indemnity agreement will cover any future problems.

To meet both industry expectations and best practices, title agents, like the team at Liberty Title, use PropLogix Release Tracking after every closing to save time and quickly resolve post-closing problems. 

Why PropLogix Release Tracking?

guide on 7 reasons why you need to be tracking every lien release mockup

7 Reasons You Need to Track Every Release

Whether you do it yourself or choose to use a third-party like PropLogix, this guide explains why checking the public record for releases is still essential. The post-closing process has grown more complicated. Download this guide to get a deeper understanding of why you need to track every release.