Many real estate transactions are accompanied by complex title defects which need to be resolved before the transaction can be completed. While real estate lawyers are responsible for diligently researching their client’s title history before moving forward with the transaction, it is not uncommon for certain title defects, such as undischarged mortgages, to slip through the cracks due to poor record keeping or careless work by attorneys previously involved with the transfer of this title.
There are many different circumstances which can result in an undischarged mortgage. The financial institution that issued the mortgage could:
• Have filed bankruptcy
• Be in FDI receivership
• Have been merged with other banks
These factors can make it more difficult for even the most thorough real estate lawyers to identify the title defect. Unfortunately, possessing an undischarged mortgage at the time of closing can have disastrous effects on your real estate transaction. In many cases, it can completely derail the deal, or at the very least it can delay the completion of the transaction for months or even years.
In order to ensure that an undischarged mortgage does not sabotage your real estate transaction, it is crucial that you purchase title insurance. By purchasing title insurance, you will be protected in the event that a title defect, such as an undisclosed mortgage, surfaces before the closing is finalized. This is a very small expenditure for the enormous protection you gain.
The Fort Myers real estate lawyers at Lusk, Drasites, Tolisano & Smith always recommend that our clients purchase title insurance for all real estate purchases. While we will conduct a thorough investigation into the status of the property’s title and seek to resolve all defects before moving to closing, we believe that purchasing title insurance provides you with additional protection and peace of mind. When you have purchased title insurance, we can more effectively prevent a third party from making an undisclosed claim on your property.
Please contact Lusk, Drasites, Tolisano & Smith today to schedule your initial consultation. Our real estate lawyers represent clients in Fort Myers, Florida.