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Mr. Feichthaler:
I recently paid off my mortgage with a settlement I received. With that payment, I have no liens against my property, and I would be able to keep all of the proceeds from a sale. Is there anything that I need to do, and what do I need to prove I own the house outright?
-- Donald F.
Dear Donald,
It is great you were able to pay off the mortgage, hopefully the settlement was not for something other than a financial matter. When you purchased your property and obtained a loan, you would have signed a mortgage. That mortgage would be recorded in Lee County public records, which provides notice to the public that they have a lien on the property. It is very likely that this lien will be in first position, so that any other liens are junior to it. When the mortgage is paid off, the lender is required to prepare and record a Satisfaction of Mortgage in the public records, which now tells the public that the original mortgage no longer encumbers the home.
Most lenders are diligent in preparing and recording satisfactions, but this is not always the case. Especially with smaller lenders, or private individual lenders, a satisfaction is never recorded. If this is not recorded, the mortgage will still be against the property, even though you paid it in full.
I recommend speaking with the lender, and provide them correspondence, asking for proof that the debt has been paid in full, and to provide you a copy of the recorded Satisfaction of Mortgage. You can also search your name in the public records with the Lee County Clerk of Courts to see what has, or what has not, been recorded.
If no satisfaction is recorded, and you then decide to sell the property, this cloud on title could delay your sale. Although banks are required to execute and record the satisfaction within 60 days, if they do not, your remedies all involve lawsuits to remove the mortgage from the property. Another situation where asking questions and confirming actions could save a lot of time and expense later.
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.