Getting Marked Title Commitment at Closing Could Save You Time and Money Down The Road! (Don’t want to read it? Watch the video here instead!)
If you’re buying a home from a seller who needs to pay off a mortgage on the property (or a previous owner had a mortgage on the property), it’s a good idea to get what’s called a “Marked Title Commitment” from the Title Agency conducting the closing.
Mortgage Companies and Banks have an obligation to “discharge a mortgage” (which releases the lien) from the property within a short period of time after it’s been paid off.
“You may not be aware that [the] bank actually holds the title to [the] property until [the] home loan [is paid] in full.” (Finty). So, you don’t want to buy a house and property if the previous owner’s mortgage has not been “discharged,” because that mortgage company may still have a claim on the title. Getting a “marked title commitment” from the Title Agency at closing means that the Title Company will step in and pursue getting the mortgage discharged if the previous owner’s mortgage company refuses to do so.
Banks are buying banks all the time and the discharging of previous mortgages can get lost in the shuffle during these mergers. Keep it simple for yourself and ask the Title Company at closing to provide you with a “Marked Title Commitment”!
Note: If you work with me exclusively as your “buyer’s agent,” I provide, at no cost to you, a review of all closing documents by an attorney exclusively looking out for your interests.