Gone to record
After you close, your closing “goes to record.” This is the process of getting your mortgage, deed, and other paperwork into the system. Someone paid by the closing attorney will go to the registry to get the paperwork filed into a registry of deeds database. (It can be done by a non-lawyer. There are errand services to do this for attorney’s offices.) Within a couple of hours of most closings, a new owner can see his/her deed on line at the local registry. The original paper deed will show up, by mail, months later. You can file it, but you don’t need to take extra-good care of it. To sell, you do not need an original deed; it is not like the title you have for your car. The important thing is that your deed is recorded at your local registry of deeds.
A registry is an old-fashioned system. The filing is done by Book and Page. This corresponds to big books with big pages. On-line searching can be done by document (Book and Page number or type of document), name (of buyer or seller) or address.
My buyers check to see that their purchase has gone to record. The ones that haven’t been patrolling the databases for months find this really neat. They also realize anyone can see it. They wonder about their privacy. What is not on record is your interest rate, what you paid along the way, or your social security number.
Getting the purchase to record is the easy part, and it goes well almost all the time. The problems develop later. Buyers rarely check later to see that the discharges (which take a while to process through the lenders) get to record.
At closing, the closing attorney is responsible for paying off any outstanding seller’s liens on the property. That can include municipal fees, like real estate taxes. It also includes paying off any mortgages and closing credit lines the previous owner had attached to the property. The closing attorney keeps a record of those payoffs.
Months later, the seller’s lender sends a “discharge” to the local registry. The discharge is added to the public record, showing that the prior mortgage is paid off. This discharge should be filed in a way that it can be found by document, name, or address.
Therein lies the problem… Not all closing attorneys confirm that discharges have been recorded properly. Discharges get lost in the mail and get lost in the filing system. If no one checks, no one knows. Then, years later, a the once-new owner goes to sell. The title examiner for the new buyer’s lender finds no discharge for mortgage from the owner before that seller. According to the record at the registry, there is still a $200,000 lien on the property. The current seller does not have a clear title. Then, there is a scramble to find the discharge before closing.
I got a call last week from the closing attorney from my refinance from last year. He routinely confirms the discharges before closing his office file. He couldn’t find our discharge. He got the Book and Page from the lender. That Book and Page had someone else’s information on it. He found our discharge on the next page, but it was indexed to yet another person. And our name was spelled wrong where it was indexed to the wrong page. Someone at the Middlesex Registry had a bad day.
The good news is that the Middlesex Registry is very willing to fix problems that are brought to their attention. That’s what I did. That's what they did.
Missing discharges are pretty common. Did you check that the ones on your house went to record? Did you have fireworks before closing because the seller had to hunt down a discharge at the last minute?
