Friday, August 05, 2011

query by email: title agent pays off wrong mortgage

Hi, Diane,

How are you?  I was looking for help on the web and your blog came out.  I know you said that you are not an attorney but you have more knowledge on the title insurance more that I do.  Thus, can you please hear me out and provide me with your opinion?

I refi my house back to April of this year.  The title company a mistake on the pay off of my mortgage.  Instead paying off house A, the title company paid off the house B.  The title agent agree he made a mistake on paying to wrong account.  We have two houses, each one has one mortgage.  After the refi, we have two houses, one with no lien and one with two mortgages.  Initially, the title agent wanted me to refi the house with no mortgage and put the money back to the back to fix the problem.  However, this house only have 7 more years to go on the loan and we are paying principle mostly on this loan as you can see.  The title agent could not give me a refi rate and condition to fit me requirements.

Then he told me that my new bank that is second liens on my house is going to "work it out internally".  It's been 5 weeks and I haven't hear from bank or the title agent.  I found out that I can file a title insurance claim.  Is this true?  I never received the copy of my policy.  How do I go from here?

Thank you very much for your time and hope to hear from you......


Hi, Vickie:

The title insurance company agent made an error and has an obligation to rectify it at no expense to you.

I suggest that you send a letter to your mortgage lender - the most recent refinance lender.  Point out the error.  The mortgage lender has a loan policy which insures that they have a first lien on the insured property.  They can make the claim.  Send this letter CERTIFIED mail and copy the title insurance agent, the state insurance department and Consumer Financial Protection Bureau.  This will get the attention of everyone and move a resolution forward.

Good luck and thanks for reading the blog!

Diane Cipa

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