Think of how many people live in the world and of those people how many people have the last name of “Smith” or “Jones.” There are over 7 billion people who could possibly have your same name. So it’s no surprise that during real estate transactions, someone with a similar name could cause some headaches during your closing process.
When a title search is done on a real estate transaction, the title examiner not only has the responsibility of producing documents that pertain specifically to the property, but also eliminate the ones that don’t.
For example, once a mortgage has been paid off at closing and the property released from the lien, by way of a cancellation or satisfaction, the mortgage is no longer applicable. The property is no longer being used as collateral for that debt. The title examiner doesn’t need to pull a copy of the mortgage, but will make sure release has been filed with the local clerk of court.
While using the same methodology, as in the mortgage example, the same process is followed when searching the names of buyers and sellers. Usually the title examiner will search the grantee or grantor index (when available) to ensure any liens against the buyer or seller are addressed prior to closing.
In many cases, liens and judgments are found for people with common names such as “John Smith” or “Mary Johnson.” It is up to the attorney to determine whether the liens or judgments are applicable, and if they are, what is needed to satisfy the lien of record.
If the lien or judgment is against you, the attorney would then contact the lien holder first, to find out if the lien is still good, second, to find out if there’s a balance and if so, how much to satisfy the lien, or third, obtain a cancellation if the debt has been paid in full, but was mistakenly not cancelled of record.
Some liens or judgments can be ruled out with a phone call to the lien holder. A verification of the name, address, social security number or other identifying information can be used to determine if the lien is against someone else with a similar name. In the absence of a solid verification, the attorney may prepare an affidavit for you to sign swearing under oath that the lien or judgement is not against you, but against someone with a similar name.
Outstanding liens or judgments can potentially delay the closing and halt the transaction until the matter has been resolved. It is best to cooperate with the attorney and provide the information they need in a timely manner to resolve the issue to avoid delays.
Unfortunately, situations like this will happen and it is the responsibility of the attorney and title examiner to clear up the liens and judgements and provide supporting documentation for the new owner.
If you have any questions about liens or judgments or you want to learn more about title insurance, contact us! As a member of the American Land Title Association (ALTA), we have the resources to help make your real estate transaction smooth and easy. Find out how U.S. Title Solutions can help you!