(I Can’t Get No) Satisfaction.. A phrase you hope to never use as a seller.
The Rolling Stones famously lamented “(I Can’t Get No) Satisfaction,” and for many real estate sellers, that sentiment can ring true when it comes to mortgage satisfactions at closing. Understanding how to manage this process can help prevent last-minute delays and contractual breaches.
When you purchase real property with a loan, or when you take out debt against real property, a Deed of Trust is typically recorded to secure that debt. Upon paying off your mortgage or debt, a satisfaction document gets recorded to release the property from the lien. In North Carolina, lenders are legally required to record this satisfaction but often it can get missed, forgotten, or recorded incorrectly.
During the selling process, a closing attorney conducts a title search to identify any outstanding debts tied to the seller and the property. If there are unresolved debts, they must be settled at closing or canceled before closing. Sellers are contractually obligated to provide insurable and marketable title under the standard form 2-T contract, and failure to do so breaches the contract. Sometimes, an open Deed of Trust appears in a title search due to a satisfaction not being recorded, often because loans have been sold, or previous lenders are no longer in business. This situation leaves sellers scrambling to obtain satisfactions, which can delay closings and complicate the transaction.
There are third party services that can help sellers in these situations. However, the seller will remain in breach of contract, unable to provide clean and clear title, until a satisfaction is obtained. There are some ways the closing attorney may be able to work with the title company to insure over the open Deed of Trust, but these options are limited and often do not apply.
To mitigate these issues, it’s crucial to follow up with your lenders after paying off a mortgage or debt against the property, to ensure that a satisfaction is recorded with the Register of Deeds for the county in which the property lies. Additionally, refinancing with a licensed attorney rather than an out of state third party settlement agency can help avoid such complications.
At Jackson Law, we proactively send satisfaction letters to seller’s payoff lenders immediately after closing to prompt the recording of satisfactions. We monitor the register of deeds to ensure a satisfaction gets recorded. If a satisfaction isn’t recorded within 30 days, we take additional steps to ensure it gets done, fulfilling all legal requirements, and preventing this issue in the future.
With our diligent approach, you can rest easy knowing that your closing will proceed smoothly, leaving the singing to the Stones.
