Title Trouble
Call it “Revenge of the Sub-Prime Lenders.”
Once upon at time, when interest rates were (also) zero but credit standards were non-existent, lots of homeowners tapped their homes for easy cash.
Fast forward a decade or so, and lots of those lenders are now gone (as in, shut down by the FDIC), and at least some of those mortgaged homes are now being sold — sometimes, by the original owner’s heirs.
What does all that add up to?
Missing mortgage satisfactions that can hold up closings.
Missing What??
The easiest case for the title folks (whose job it is to track down the missing satisfaction) is a paid-off loan originated by a still-existing bank.
Next most difficult: a paid-off loan originated by a defunct institution — or more than one!
That can happen when bank #1 fails and is acquired by bank #2, which in turn fails and is acquired by bank #3, etc.
Which leaves the most challenging case: an oft-transferred loan with an outstanding balance, that the original borrower’s heirs may not have even been aware of.
P.S.: of course, healthy banks can be acquired by and/or merged into other banks, which also makes tracing an old loan more difficult.
