Helping Homeowners, Realtors, and Real Estate Attorneys
Solve Title Exam Issues.

On the hook for a mortgage discharge

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In Massachusetts, only an attorney in good standing licensed to practice law can conduct Real Estate Closings. The legislature has made this the law.  The idea behind this concept is due to an attorney being held out to a high standard of professional care.
With the varies duties and obligations that attorneys confront, one such duty as part of a real estate closing is to ensure that any mortgage they pay off is eventually properly discharged with the appropriate registry of deeds.

Most lenders will automatically send the mortgage discharge for a paid off loan directly to the registry where the mortgage was recorded. (Requiring no extra work on behalf of the attorney other than confirming the discharge was in fact recorded.)
On the other hand, many lenders send discharges directly to the closing attorneys. This is what may at times get attorneys in trouble. The attorney’s office may receive a discharge, but it may eventually be lost, misplaced, or just set it aside for recording at some point in the future.

So while it is true the attorney is ultimately responsible for recording the discharge for a paid off mortgage, there are times where you may spend more time trying to track the attorney and waiting for their response with regard to the document’s status.
Depending on the lender, your quicker path to clear up title would be to contact an office such as mine, to independently pursue the discharge request on your behalf. We’ll pursue an indemnification letter if you require it, while simultaneously pursuing the discharge from the proper lender.

This procedure will ensure that although you may be able to get a letter of indemnification, it still has not resolved the title issue which will then become your problem once your closing takes place.

In my personal experience, I have realized that many attorneys who write indemnification letters do follow up with actually getting a proper discharge and recording it at the registry of deeds. (That it what they are all suppose to do). But I also have my list of attorney who have this impression that upon writing an indemnification letter, they are off the hook. This is not the case.

A better habit is to insist on the discharge and only rely on the indemnification as a temporary measure. I usually follow up with attorney about 30 days after the closing. (Some have taken care of the title issues, other haven’t moved a finger).

Again, whether you are the attorney in need of the discharge or indemnification, or if you have previously issued an indemnification and don’t know where to turn for the mortgage discharge. Please contact me and I will be happy to help. You will be happy you did.

This article was written by: Francisco

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