HELOC/open end payoff, satisfaction, reconveyance.....

When you find an "open end" or line of credit/HELOC mortgage on record in a title search, you really need proceed carefully.  Most important is to freeze the account when you get your payoff letter.  You need to stop the moving money target.  There are some lenders who refuse to put a freeze on these accounts so your post closing payoff procedure can include a few extra steps to eliminate risk.  Here are some tips:

1. Add language to the mortgage payoff clause in Schedule B1.  This is what we use:  NOTE:  This is an open line of credit.  The account holder must contact this mortgage lender and request that they freeze the credit line in anticipation of payoff, closure, and satisfaction.
2. Have the mortgagor sign a statement requesting that the account be closed and satisfied.  If the lender does not include this type of statement in the payoff letter, create one yourself.  It is okay to keep it simple and I believe it is best to write it on the payoff letter.  We just legibly handwrite "Please close and satisfy."  We have the mortgagor sign this which does two things for us.  It give us an acknowledgment that the mortgagor is aware of the payoff and has agreed that the account should be closed and satisfied.  This eliminates any confusion over whether they can still use the account after closing and before the payoff is posted.  It also gives them a chance to tell you if they have drawn additional funds after the payoff letter was issued.
3. Send the payoff letter and funds to the lender rather than processing the payoff by wire.  We sometimes have trouble in our office remembering this step.  We are so used to doing payoffs by wire that sometimes an open end account slips through.  If you wire, the lender won't get that "Please close and satisfy." statement which I believe is most effective when received by the lender with the funds.

If after you have paid off the mortgage you have trouble getting the lender to satisfy it of record, don't give up.  We find letters are most effective rather than the phone.  If your first letter doesn't get a response, then send a second via certified mail.  Certified mail is the most effective tool we have to elicit a response from most anyone.  It's the first step in creating a case and it is a recognizable step. ;)