Q: How can you figure out if a canceled mortgage is canceled by the county?
A: In a recent column we discussed how a lender should and generally does send the canceled note and mortgage back to the homeowner once the loan is paid in full. As part of that process, the lender also sends a document to the county recorder of deeds office or other office in charge of filing or handling real estate documents. That document is usually called a release of mortgage, release deed or satisfaction of mortgage.
The name may differ depending on where you live, but what it means is the lender has issued a document that becomes part of the public record; that document states the lender no longer has a lien on the homeowner’s property.
Your question, we suspect, may have to do with knowing how to find that document or may have to do with the confusion of still seeing a mortgage on the title to a property long after it was paid off. More information is available online these days, and people are accessing that information. Frequently, however, people do not understand what the information is actually telling them.
For example, let’s say you purchased a home in 2003 and obtained a mortgage at that time. If your county makes this information available online, shortly after the purchase closes you could go on that website and see the deed conveying title to you was recorded along with a mortgage to your new lender.
Fast-forward to 2018, you might have refinanced that original loan several times. When you look at that website today, you will see that same deed from when you purchased your home along with the many mortgages you took out since you purchased the home. Here is the key: For each mortgage that has been paid off, you should also see a document that released that paid off mortgage. You might need a bit of real estate knowledge to tie the release to the mortgage, but with a bit of sleuthing, you should be able to figure out which release goes with which mortgage.
If you refinanced five times since you purchased the home, you should see five releases recorded or filed against your property. Keep in mind the mortgage filings never disappear; it is just that the lien is no longer valid once the release is recorded or filed.
Similarly, if you looked at your credit history, you might see you took out those mortgages, have credit cards and have student loans, and those items may still show on your credit history long after you have paid them off in full. The key on your credit history is to see the notation on the file showing the loan was “paid as agreed” or the “account was closed.”
Back to your question. If you receive a document from the lender or the county that is a “release of mortgage” (or the like) and the document indicates it has been recorded by the county, that document is enough to know the county shows your mortgage lien as released. But how can you tell if the document has been recorded or filed? Usually the document will have stickers, stamps or ink marks with the recorder’s office or filing office on the top right corner of the document; sometimes they are put elsewhere on the page, but it is generally quite visible and clear a document has those marks.
If you did not receive that document, you can go to the county in person and ask to view the records. Usually county officials are quite helpful to residents who come in to inspect records. As we mentioned earlier, if you have web access to that site, you can search at home for the records.
Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.