Lien still on property for 2nd mortgage that was PIF, MC out of business

[PepperPaul]

Here’s my problem, hoping someone has a suggestion for me.

I had a loan that was a 2nd with GMAC mortgage for $27k. In 2006, I refinanced that mortgage with a new 2nd mortgage for $54k, also with GMAC mortgage. I still have that $54k mortgage, but GMAC is no longer is business. The mortgage was transferred to Ocwen who either bought out or got GMAC through bankruptcy. My current mortgage is through PHH, who is the parent company of Ocwen.

I am now trying to refinance my mortgage and roll my 1st and 2nd into one mortgage, which will save me about $800/month. However, the title company found 3 liens on my property; one for the original GMAC mortgage, one for the PHH mortgage, and one for my Chase mortgage, which is my current 1st mortgage.

I contacted PHH as I have paperwork from my refi that shows that mortgage was used in part to pay off the original GMAC mortgage. However, because they never actually serviced that loan, they can’t (or won’t) remove that lien off my title. Because the original GMAC mortgage was paid in full before GMAC was dissolved, the loan was never transferred to another servicer that can remove the lien. I’m not sure how to proceed now as I can’t complete my refi until I get this lien removed, but no one is servicing it to remove it. I do not have any paperwork from GMAC that shows the original mortgage was paid, just the HUD-1 statement from the refi showing the money was going from the refi to GMAC for the same amount as the original GMAC mortgage (but no loan number reflecting the original mortgage was included in the paperwork).

One other thing to note, I refinanced my 1st mortgage in 2011. All three liens were on the Title report during that refinance, so I’m not sure why it didn’t come up then. Chase basically ignored the other two liens that were on the property. Maybe because they were taking first position and it wouldn’t affect them either way? Would the title insurance they took help at all in this situation? I didn’t get title insurance, just them as the mortgage company.

 

[OneHugeMess]

One other thing to note, I refinanced my 1st mortgage in 2011. All three liens were on the Title report during that refinance, so I’m not sure why it didn’t come up then. Chase basically ignored the other two liens that were on the property. Maybe because they were taking first position and it wouldn’t affect them either way? Would the title insurance they took help at all in this situation? I didn’t get title insurance, just them as the mortgage company.

Chase would have had to file what's called a "subordination" agreement, with the two current lien holders (GMAC & PHH) signing an agreement to be behind the first loan. Otherwise... Chase is currently 3rd in line to foreclose. The title insurance company that was ultizied by the lender probably can help in some way.

Here’s my problem, hoping someone has a suggestion for me.

I had a loan that was a 2nd with GMAC mortgage for $27k. In 2006, I refinanced that mortgage with a new 2nd mortgage for $54k, also with GMAC mortgage. I still have that $54k mortgage, but GMAC is no longer is business. The mortgage was transferred to Ocwen who either bought out or got GMAC through bankruptcy. My current mortgage is through PHH, who is the parent company of Ocwen.

Have you spoken with Ally Bank by chance? Also... this may be helpful.

FDIC: Obtaining a Lien Release

 

[Jzone]

Check your county register of deeds for a paper trail. If GMAC recorded the $54,000 mortgage, they should of also recorded a release of the original $27,000 mortgage lien. Looks like that didnt happen, but worth it to check again.

What does PHH say the balance of the 2nd is?

You may have to file a "quiet title" action. A quiet title action is decided by a judge in civil circuit court usually involving 2 different parties contesting ownership of property. In this case, it's just you trying to "quiet" a lien that should of been removed. Since its only you, it may be easier since there is not another party to contest ownership.

Basically, you or your real estate attorney, would present your evidence to a judge and notices would be sent to PHH and Chase to show their ownership interests since they have liens on the property. The judge will determine what liens exist, priority of those liens and what liens were not recorded correctly. That decision is then filed with your county clerk and a new chain of title is entered.