What to do if I recently refinanced my home but my old mortgage was never paid off?
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What to do if I recently refinanced my home but my old mortgage was never paid off?
The title company that was supposed to distribute funds to pay off my old mortgage has gone out of business. I have talked to the insurance underwriter and he said they have filed a lawsuit against the owner of the title company and he does not know how soon it will be resolved. In the mean time, my old bank still has a lien on my property. What is my best course of action? If the funds are not recovered, who will be responsible for the old mortgage? Me, the lender (who chose the title company) or the title insurer (who guarantees the property be free of liens).
Asked on June 24, 2011 under Real Estate Law, Ohio
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Well the old lender certainly will come after you as the easiest target and it is really no consolation to you that ultimately you will not be liable when they start foreclosure proceedings for non-payment of the original mortgage. I think that you need to take all the documentation to an attorney n your behalf as soon as you possibly can. You may need to bring a lawsuit against all the parties to insure that someone is held responsible and that the bank does not foreclose in the meantime. If thhe title insurer has to pay off the property at this point in time since they insured it remains to be seen. But it is a good place to start. Good luck to you.
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