Can I nullify a mortgage contract due to the title company’s lack of due diligence and the mortgage company not checking the proper title to my house?

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Can I nullify a mortgage contract due to the title company’s lack of due diligence and the mortgage company not checking the proper title to my house?

Original deed named husband and wife. Husband died 9 years ago. Refinanced the house within 6 months 8 years ago. The mortgage company closed the loan with my name only (single person). Fast forward to now. During another refinance I was told that the house should be in probate due to the titling of the property. There was a mistake years ago. I was advised to get a probate lawyer so the mortgage company can refinance it for me. Do I have any recourse?

Asked on August 5, 2011 Kansas

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Title issues and loan issues concerning the sale or refinancing of real property are entirely two different matters. When one buys real property he or she typically buys title insurance regardless if whether or not a loan is needed to purchase the property. Title insurance protects the new owner's rights and title to the property acquired.

When one buys property where a loan is needed (or refinances the property's loan), the lender also requires title insurance to safeguard the loan from any senior liens of record as well. The new owner of the property and the lender rely upon the preliminary report issues by title before close and the issued title insurance policy in buying the property, agreeing to the loan and making the loan.

You cannot cancel your existing loan due to the title company's lack of due diligence concerning how legal title should be on the real property for the secured loan where your former husband's name should have been removed from title before the loan was taken.

What has happened is that in order to refinance, the new lender is making a condition of the loan that title to the property needs to reflect that you are its sole owner since your husband who is still on title passed away nine years ago.

If legal title to the property is in joint tenancy or as community property with the right of survivorship between you and your deceased husband, all you need to do is sign an affidavit of surviving joint tenant or spouse, attach a certified copy of your husband's death certificate to the affidavit, and record on the property.

Title to the property would be in you name alone at this point.

Good luck.


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