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In May of 2013, ServiceLink received a contract for an all–cash sale for a Buyer to purchase an REO bank owned property in New Jersey for $59,850. The title was not clear at the time the buyer entered into the purchase contract because the seller/bank was waiting for a deed in lieu (DIL) from the original owner and lien releases to be recorded.

To expedite the closing process, the ServiceLink closer asked the attorney who prepared the DIL and lien releases if they could record the DIL and lien releases with the Buyer's new purchase deed. The attorney agreed.

The ServiceLink closer received the original DIL and lien releases for recording. They had the purchase deed prepared and executed by the seller/bank representative. The transaction closed in June, the file was completely disbursed and documents were sent out to a vendor for recording.

The recording service vendor rejected the documents which were prepared by a law firm handling the DIL and sent them back for correction. Before you know it, it was December and the purchaser had since fixed up and re–sold the property. In fact he had it under contract with a new buyer and could not complete the sale because he was not recorded as the owner of the property.

After getting all the original documents back from the recording service, the ServiceLink closer noticed the DIL document was missing and now she needed to have a new DIL executed or find the original one. She contacted the attorney's office who stated they had it and corrected it for recording, but would not release it now because there was a new lien of record.

Kim Arndt and Chris Daniel, the assistant vice presidents and directors at ServiceLink working tirelessly on this never–ending transaction, did some research and found out the new lien the attorney discovered was already satisfied. The attorney finally agreed to send the corrected DIL back to ServiceLink for recording. The closer at ServiceLink sent the documents to another recording service vendor who expedited the request and finally had the documents recorded on January 31, 2014.

This is where it gets crazy! After the original documents were recorded and sent back, the abstractor reported a Notice of Settlement of record. It appeared the original owner, who signed the DIL, had a buyer to purchase his property and recorded a notice of the impending sale.

Kim and Chris acted swiftly again and contacted ServiceLink's account executive/director for this REO bank, Cherri Springer. They brought her up–to–speed on the transaction and recorded Notice of Settlement. She called the title company that recorded the Notice of Settlement and asked if their file from the original owner had closed.

Luckily, it had not, but it was scheduled to close on February 7, 2014. Cherri explained to them their "seller" was no longer the valid owner of the property and that he had executed a DIL in 2013. They stopped the sale transaction.

Sometimes when a transaction goes on and on with post–closing issues it can be put on the "back burner" and become the lowest priority. That did not happen in this case. Chris, Kim and Cherri stayed on top of the transaction, reacted swiftly to correct documents, research liens and ultimately stop an intervening sale and deed. For their efforts they have been rewarded $1,000 and a letter of recognition from the Company.

 

 
 

MORAL OF THE STORY

Documents sent for recording have to be scrutinized for accuracy and completeness. If the recording documents are returned for errors it is important to correct them as quickly as possible and then attempt recording again. If there is any lapse of time, the public records should be re–examined for intervening liens, conveyance deeds or any other document recorded that might cloud the title to the subject property.

Any recorded documents placing a cloud on title have to be removed or dealt with prior to recording the documents from the current transaction, enabling the insurer to issue a valid title insurance policy or policies after recordation. The process is tedious and tiresome, but necessary none the less, since our policies insure free and clear marketable title to owners and lien position or status to lenders.

If the clouds on title are not cleared prior to recording documents for the current transaction, the insured owner or lender might be in a position to make a claim against their policy, which will cost the company time and money to process and possibly have to pay–out the policy limit.

 
 
 
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