Title company did not clear title

[jmdw99]

State : PA

I have recently refinanced a rehabbed property that I purchased last year. When buying the property it had many liens (20k) one of which was from the water department. I made a deal with the water department to pay 71% of the bill as payment in full. I’ve recently refinanced the property after rehab and found the remainder of the bill is still on the property.

I called the water department and they said the original title company is responsible for clearing the debt. The title company that took care of the refi also says the old title company should have no problem clearing the lien since we have all the supporting paperwork. Unfortunately , my title company has written a letter to the old title company and made countless calls, as have I but the company is unresponsive.

Now I have 2 problems- I can’t move in tenants since the water can't be turned on I cannot receive the remainder of my refi funds. The title company I am working with currently is holding the water department’s payoff amount since the paperwork supports, that funds should go to me not the water department. It has been a month and they don't even return my calls.

I would like to write a certified letter citing actual statutes (maybe concerning the signing of the HUD-1?) to make the title company finally clear this matter. What are the laws concerning clearing title. Thank you.

 

[Rhubarb297]

State : PA

I have recently refinanced a rehabbed property that I purchased last year. When buying the property it had many liens (20k) one of which was from the water department. I made a deal with the water department to pay 71% of the bill as payment in full. I’ve recently refinanced the property after rehab and found the remainder of the bill is still on the property.
.

I guess I'm confused. You bought rehabbed property. It had a lien on it from the water department in the amount of $20K. Did you have title insurance when the rehabbed property was originally purchased? Did they just miss the lien? If so, I'm not sure why you would pay any of the lien that wasn't yours, much less 71% of a $20K bill. The title company would be responsible for the lien and the title company then would have a claim against the original owner. (Probably uncollectable.)

Did the lien happen after you bought it and then the lien was missed when you refinanced it? If so, the title insurance company would have to pay the lien to protect the lender's mortgage lien (assume the lender has title insurance) then the title insurance company would have a claim against you because the lien is yours. Any liens you acquire after buying the property are yours.

 

[seniorjudge]

Q: I made a deal with the water department to pay 71% of the bill as payment in full.
A: Did you pay them? Do you have your receipt? Was this lien filed in the lad deed records of your county?

Q: I’ve recently refinanced the property after rehab and found the remainder of the bill is still on the property.
A: If you did pay them in full and have a receipt, you need to get a satisfaction and file it in the land deed records of your county.

Q: I called the water department and they said the original title company is responsible for clearing the debt.
A: Why? You paid it off; you should make sure the lien is released (see above answers).

Q: The title company that took care of the refi also says the old title company should have no problem clearing the lien since we have all the supporting paperwork.
A: I do not understand what that means. Explain.

Q: Now I have 2 problems- I can’t move in tenants since the water can't be turned on I cannot receive the remainder of my refi funds. The title company I am working with currently is holding the water department’s payoff amount since the paperwork supports, that funds should go to me not the water department. It has been a month and they don't even return my calls.
A: Who is holding what funds? I thought you said the H2O had been paid off? Who is not returning your calls?

Q: I would like to write a certified letter citing actual statutes (maybe concerning the signing of the HUD-1?) to make the title company finally clear this matter. What are the laws concerning clearing title.
A: Pay the water company off, get a satisfaction, and record it in the land deed records of your county.

 

[seniorjudge]

One more question, do YOU have an owner's title policy on this land?

 

[jmdw99]

I guess I'm confused. You bought rehabbed property. It had a lien on it from the water department in the amount of $20K. Did you have title insurance when the rehabbed property was originally purchased? Did they just miss the lien? If so, I'm not sure why you would pay any of the lien that wasn't yours, much less 71% of a $20K bill. The title company would be responsible for the lien and the title company then would have a claim against the original owner. (Probably uncollectable.)

Did the lien happen after you bought it and then the lien was missed when you refinanced it? If so, the title insurance company would have to pay the lien to protect the lender's mortgage lien (assume the lender has title insurance) then the title insurance company would have a claim against you because the lien is yours. Any liens you acquire after buying the property are yours.

I hope this clarifies..
I paid all the sellers leins for a fixer -up property. The property is worth much more than combined leins and fix-up cost and the only way we could purchase was to clear the leins (about 20 k). The water bill was approximately 7k - the water department accepted 5k. All liens were paid at closing when the property was purchased. It wasn't until the refinance that I found out the lein still existed though it was already paid when I aquired the property. The hud-1 form also show that it was paid at purchase but now it is stilll on the property. The title company does not even return phone calls to rectify the problem.

any help is appreciated

 

[jmdw99]

Q: I made a deal with the water department to pay 71% of the bill as payment in full.
A: Did you pay them? Do you have your receipt? Was this lien filed in the lad deed records of your county?

Yes, I paid the water department and have a receipt. Since we also made a deal with the mortgage company (property was close to foreclosure) all liens had to be paid at the table to complete the sell. Not certain. It was a lein that came up on original title search from the water department.

Q: I’ve recently refinanced the property after rehab and found the remainder of the bill is still on the property.
A: If you did pay them in full and have a receipt, you need to get a satisfaction and file it in the land deed records of your county.

understood

Q: I called the water department and they said the original title company is responsible for clearing the debt.
A: Why? You paid it off; you should make sure the lien is released (see above answers).

Not sure exactly - city of Philadelphia said they were not responsible and the title company has to fix it on their end. The title company that did the refinance also sent a letter to the water department. No response.

Q: The title company that took care of the refi also says the old title company should have no problem clearing the lien since we have all the supporting paperwork.
A: I do not understand what that means. Explain.

Have the original hud -1 that shows it was paid at the closing table. She does not want to send the pay-ooff to the city knowing it has been paid because getting ea refund to the city would be difficult.

Q: Now I have 2 problems- I can’t move in tenants since the water can't be turned on I cannot receive the remainder of my refi funds. The title company I am working with currently is holding the water department’s payoff amount since the paperwork supports, that funds should go to me not the water department. It has been a month and they don't even return my calls.
A: Who is holding what funds? I thought you said the H2O had been paid off? Who is not returning your calls?
The property was bought last year- that is when all liens - including the water was paid. We have now refinanced the property and received most of the pay-out accept for the amount the current title company is holding because the lein still appears on the property.

The title company used when purchasing the property has not cleared the lein we paid at their closing table and they have not returned my calls. They also have not returned the calls of my current title company who cannot complete the refinance payout until they fix their error (remove the lein).

Q: I would like to write a certified letter citing actual statutes (maybe concerning the signing of the HUD-1?) to make the title company finally clear this matter. What are the laws concerning clearing title.
A: Pay the water company off, get a satisfaction, and record it in the land deed records of your county.

Is this the same action the title company would have make? In other words is this the way to go around the title company? How much longer would that take as oppossed to the title company rectifying their mistake?

 

[jmdw99]

One more question, do YOU have an owner's title policy on this land?

Yes, have title insurance for amount of refinance

 

[seniorjudge]

Is this the same action the title company would have make? In other words is this the way to go around the title company? How much longer would that take as oppossed to the title company rectifying their mistake?

If the lien has been paid off by you, then why are you saying the title company made a mistake.

What mistake?

If you paid off the water company, go down there and get a satisfaction and record it in the land deed records of your county.

 

[jmdw99]

If the lien has been paid off by you, then why are you saying the title company made a mistake.

What mistake?
I was under the assumption that since I paid the lein during closing they were responsible for clearing the water lein as they did the other leins that were on the property that I paid at the table.


If you paid off the water company, go down there and get a satisfaction and record it in the land deed records of your county.

So I have to take the hud - 1 to prove myself that it was paid duting closing then. makes me wonder what the title company was paid to do.

 

[seniorjudge]

Q: So I have to take the hud - 1 to prove myself that it was paid duting closing then.

A: For the third time: take the receipt you got from the water company to the water company and ask the water company for a relase and satisfaction of the lien and then take the release and satisfaction of the water company's lien to the office in the courthouse where the land deed records are recorded and record the release and satisfaction from the water company.

 

[jmdw99]

Q: So I have to take the hud - 1 to prove myself that it was paid duting closing then.

A: For the third time: take the receipt you got from the water company to the water company and ask the water company for a relase and satisfaction of the lien and then take the release and satisfaction of the water company's lien to the office in the courthouse where the land deed records are recorded and record the release and satisfaction from the water company.

Understood - thank you

 

[seniorjudge]

Understood - thank you

You're welcome.

Post back with results.

Oh, by the way, did I tell you to go to the water company?