Is a Loan Holder Required to Provide a Release for Transfer of Title Once a Final House Payment Has Been Made?

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“This question is for my elderly folks. They purchased a house through a private mortgage and made their final payment in October. What is the next step? Doesn’t the owner need to provide them with some sort of release so they can have the title transferred to their name?

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

It has been a month since the payment and they have not heard from the woman who held the mortgage and are not sure what to do. Any advise would be appreciated. Thank you in advance.”

The short answer is yes, the holder of the loan does need to remove it from the public records to reflect the fact that it is paid off.
However, the procedure by which this is accomplished varies from state to state.

It is possible that the lender simply may not be aware of the fact that the last payment was the final one, or may be in the process of preparing the necessary paperwork. It is also possible that she is waiting for a formal request from your parents, and you should be aware that there may be a (small) cost to having the records cleared.

If you generally had a good working relationship with the lender, you might want to start with a polite letter inquiring as to her plans and the process. If you want to know the exact process and your legal rights first, the easiest way to find out may be to consult briefly with a local real estate attorney. This will also put you in a position to take quick legal action in the (hopefully unlikely) event it is necessary.

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Author: House Attorney

A house attorney has answered this question.