What happens when you paid off your mortgage…but don’t have proof?
For many homeowners who purchased homes in the 1960s-1980s, it was very common for the home to be purchased with seller financing. This is where, instead of the buyer getting a loan from a mortgage lender, the seller carried the loan and the buyer would repay the seller. The title was transferred to the buyer, and there was a deed of trust recorded against the home, in favor of the seller, which is the lien the seller had against the home in the event the buyer did not pay.
However, fast forward to where we are now, maybe 40 to 60 years later. The buyer paid off the loan many years ago, and now wishes to sell the home. When the title report is obtained, it shows that the deed of trust from the old seller is still on record. Even though the homeowner paid off that loan, the seller never released their lien by signing and recording what is known as a reconveyance. The reconveyance is what removes that lien from title of the home. So what does the homeowner do?
If the homeowner can be located, and is cooperative (two very large hurdles sometimes, unfortunately), then the proper reconveyance documents can be prepared and signed by the seller and that deed of trust is removed from the home. However, what if the homeowner can’t be located? Or what if there are not cooperative? Then in that scenario, a lawsuit will need to be filed in court. This type of lawsuit is called a quiet title action.
A quiet title action, also known as a quiet title lawsuit or quiet title proceeding, is a legal action taken to resolve disputes or uncertainties about the ownership of a property or the validity of a particular claim on the property. The purpose of a quiet title action is to “quiet” or clear any competing claims or clouds on the title, establishing a single, clear, and marketable title.
Quiet title actions typically arise when there is a disagreement or uncertainty regarding the ownership or interests in a property. For example, if there are multiple parties claiming ownership rights, if there are conflicting or unclear property records, or if there are unresolved liens or encumbrances on the property, a quiet title action can be initiated to resolve these issues. In the scenario where there is an old deed of trust on the title of a home, the purpose of the quiet title action is to prove that the buyer is the proper owner of the home, free and clear of the deed of trust from the prior seller.
The process of a quiet title action involves filing a lawsuit in the appropriate court and providing notice to all parties with potential interests in the property. The court will then evaluate the evidence and arguments presented by the parties involved to determine the rightful owner or owners of the property. The court’s decision in a quiet title action establishes a clear title, resolving any conflicting claims and providing legal certainty to the property’s ownership.
If you or someone you know is in this may need a quiet title action, how can you be prepared to increase your chances at prevailing in court? Here are a few tips:
- Locate any documentation you have regarding the loan. The deed of trust is recorded with the county, so that can be obtained, but having a copy of the promissory note is also helpful, along with any closing documents from when you purchased the home or escrow paperwork if an escrow company was managing the monthly payments.
- Obtain any proof you have showing that you made the payments on the home. Any letters, payment histories, copies of cancelled checks; anything you have showing your payments is very helpful to have.
- Identify any witnesses. If there is anyone who may have had firsthand knowledge about the repayment of your loan, identify who they are and try to located them if you can.
All of these steps will assist your attorney in preparing the lawsuit for your quiet title action. Learn more about how our office assists with quiet title actions here:
It’s important to consult with an attorney who can assess your specific circumstances and help you determine the most suitable option based on the facts of your specific case. If you need assistance with a quiet title action, reach out to our office at (206) 408-8158 or visit us online at www.dallawfirm.com and we would be happy to assist you.
We’re conveniently located in Normandy Park and offer consultations virtually or in person.
19803 1st Avenue S.
Normandy Park, WA 98148
T (206) 408-8158
F (206) 374-2810
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