The Case of the 32-Year-Old Lien
A Mystery Solved by The Magnificent Manors Team
This is the perfect example of an important lesson in home buying and how the transaction can go astray unexpectedly. Luckily, the Magnificent Manors Team has a long track record of solving seemingly unresolvable problems and negotiating solutions. Having the skills and ability to solve a mystery such as this one takes the stress off our clients and helps them achieve their real estate goals.
Now for the story. My clients were selling their north Arlington, VA rental house. We found a buyer and the transaction was proceeding smoothly…until the title search. What is a title search? In a nutshell, it’s the process of examining a property’s public records to determine its legal ownership and if it has any claims or liens – title issues are more common than you think. During this title search, a ‘cloud’ or ‘defect’ was discovered that prevented the seller from transferring a ‘clear and marketable’ title to the buyer.
This is where the plot thickens. The title search revealed the property had a lien in the form of a home equity line of credit dating back to 1989. To further complicate matters, the lender was no longer in service. Together with the title company, we decided to delay closing until the title company could clear the lien. Another option is to ‘paper over the lien’ by using title insurance to cover the ‘defect’. This would just be kicking the can down the road and the burden would be passed to the new owners when they decided to sell the property. The same ‘defect’ would appear during that title search.
We put on our figurative detective hats and got to work. I knew my client recently refinanced the mortgage. My first stop was the current lender to see if they discovered this lien and how they addressed it. The lender revealed they asked the title company to go back only 10 years – to 2011 – the lender never knew about the 1989 lien. That’s when our leads ran dry.
Then it hit me! Why don’t I go straight to the top? During my research, I discovered Bank of America purchased the lender who placed the lien. I decided to email the President of Bank of America. Why not?! I wrote the email and received a response almost immediately. After a few more correspondences, Bank of America cleared the line of credit lien, and we went to closing. Everyone involved had the peace of mind the lien was cleared! Mystery solved!
What did we learn? First, when you refinance or purchase a home, ask the title company about their methodology for conducting the title search. If they say they only go back 10 years, ask them to go back as far as the records allow. It’s imperative to have a title company you trust – one that will do their due diligence in the title search. Second, work with an agent who is a problem solver and has the courage to reach out to the highest levels when a problem is encountered. This was a reminder the real estate process isn’t always straightforward, and issues come up. Some more challenging than others. Your real estate team should include an experienced Realtor®, lender, and title attorney, who will work collectively in your best interest.
Until the next mystery….
Thinking about buying, selling, or investing in real estate in the Northern Virginia, Maryland or Washington DC areas? Let’s start the conversation! I will provide a free, no obligation home market analysis and plan designed just for you to optimize your real estate goals! I’m available by phone, text or email | 703-798-1803 | [email protected] | www.magnificentmanors.com
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