Was I a fool, and how long should this take (being paid off for property loan thru title co.)

My sister and I inherited from our father a property loan supported by a lien on the property. The borrower and property owner is a friend of my sister’s and someone whose intentions we trust. She has been paying off the loan per schedule, but now she wants to pay off the whole thing. I was contacted by a title company and asked to send the original of the note, the deed of trust, and the request for reconveyance. I did this, by certified mail, and received the return receipt, so I know they got it.

After that I sent them a request for an estimate of how long the process might take, which they never answered. It has been about a month now. I realize that is probably not long enough, but how long on average should this sort of thing take? I should add that the reason she is able to pay the loan back is that she sold part of the land to a 3rd party, so apparently they are involved in this payoff transaction. Maybe what is going on is something like escrow, where (to quote a comic I heard once) they have my money, and I have patience?

And was I a fool for just sending them the originals of those documents (I didn’t see any way around it, since I live 600 miles away from them)?

Probably surveying and deed research going on. I would say after 3 mos., you might need to worry. Since they are friends get your sister to ask the purchaser if she has any idea.

What sort of tomfoolery do you think that they might be up to? Unless they forge your signature on a release of the deed of trust or mortgage, you should be fine based upon what you have said. They can get copies of the originals from the courthouse. What will they do with the originals?

If I haven’t already revealed it, I know nothing about this stuff. My thought (such as it was) had to do with whether I can prove that we had the loan and the lien without the papers. If the courthouse also has these records, then I can relax about that part.

So, 3 months or so? I can live with that.

You should consult a lawyer in your jurisdiction. The courthouse would have them if you filed them. If you did not, then generally a purchaser without knowledge would not be subject to your lien.

I don’t see how she could have sold part of the land to a 3rd party if you have a lien on it. They would need to pay you off before that deal goes through, not after.

Unless we’re missing something, I would speculate that she has a contract to sell part of the land and intends to pay you off with the proceeds once she sells it. But that deal has not closed yet and the title company will pay you off once it does. The holdup is probably that sale closing, which could be anything.

Again, this is unless there’s some missing info here.

I believe the 3rd party purchase makes it a 3-way transaction: the buyer agrees to buy and puts the money in escrow; the title company uses that money to clear the lien and pay off the loan and the rest (if any) goes to the original borrower; once the title is clear the property that was purchased is deeded to the purchaser, and the loan payoff is sent to us.

It doesn’t seem likely to me that the title company would have started these proceedings unless the purchaser had already signed the purchase agreement and the money deposited in escrow, or at least a significant earnest money payment made. But the details I have been given have been minimal.

Understood. But the money transfer part of it is the fastest part of it.

The title company has to go through the whole thing well in advance of the money being deposited into escrow. Once the contract is signed and the title company hired (whether by the buyer/borrower or the mortgage company) the title company needs to start doing their title searches and making sure they have a handle on any and all liens connected to this property. Meanwhile, the mortgage company, if any, is doing their own due diligence on the buyer/borrower’s income and debts and bank transactions etc. Once they’re all ready to close, the actual transaction takes place, with the buyer or mortgage company transferring money to the title company, them using some of it to pay off any liens and giving the rest to the seller, as well as issuing a title policy and recording the sale with the county authorities.

So what I’m speculating is that the money is not currently in escrow and that the title company and/or mortgage company (and/or lawyers) are still dotting their i’s and crossing their t’s, and when they’re all done then the actual transfer of property and cash will take place very quickly.

I could be wrong, of course. This is speculation, based on these types of processes that I’ve been involved in.

Again, consult a lawyer. The recording of liens in the county courthouse is a very important step that puts a third party on notice of your lien. Without that notice, a third party may take free of your lien.

See the above link, but call a lawyer in your jurisdiction. It will be well worth your money as even if you have screwed up until this point, recording your lien may still be effective. I am a lawyer, but not yours. I strongly advise you to get legal assistance.

I wouldn’t consult a lawyer just yet. In many (most?) counties you can simply check online to see if your lien has been recorded. Even if not, you can probably stop in at the county courthouse and check. Much cheaper than a lawyer.

I’m not making any money on this and I don’t care if another lawyer I don’t know makes any money off of it or not. The OP hasn’t stated the amount of money at stake, but if it is at least $5k, I would advise any of my family members to hire a lawyer. (Me in that instance, but you know what I mean)

Yes, you probably can do an online records check. When was the lien entered? Who drafted the lien? Was it notarized properly? Does it contain the correct language of conveyance?

Hell, I do DIY stuff. If I need a new electrical outlet in the bedroom, I drill the hole and run the wire. I think I can do it without burning down the house. However, if I burn down the house, I will kick myself and realize that I should have hired an electrician.

The choice is obviously the OP’s and my advice is to get the lawyer now.

ETA: I’m not giving a quote, but I couldn’t imagine that an attorney would charge more than $500 for this job. But again, all disclaimers apply.

Myself, I’m not even giving any advice. (And I certainly have no interest in how the OP spends his money.)

All I can say is that if it were me in that situation as described in the OP, I would not hire a lawyer for this.