When you take out a second mortgage, the lender records a lien on the house at the county court house. When you pay off a mortgage, the lender provides the courthouse with a satisfaction of lien. The lien and the satisfaction of lien are records that stay on file permanently. When houses are sold, title companies perform searches on behalf of home buyers to ensure there are no outstanding liens on the home. The Internal Revenue Service places liens on the homes of people who owe back taxes and other U.S. government departments and creditors can also place liens on houses.
Contact the lender that holds your second mortgage. Ask for a loan payoff with a 30 day per diem. The per diem instructs you how much to add to the payoff amount for every day that passes between the day you receive the quote and the day you pay it off. You can make a loan payoff electronically if you provide the lender with your bank account number and routing number. You can pay off small loan amounts with a credit or debit card. Many banks prefer to receive payoffs in the form of cashiers checks or official checks. You can buy one of these checks at your own bank and mail it to the lender.
Contact your lender to verify that funds were received for the payoff. Electronic transactions normally process the same day. Check payoffs take up to two weeks to clear. If you have a fixed rate term loan, the lender sends the satisfaction of lien directly to the county court when the funds are received.
If you have a revolving credit second mortgage such as a home equity line, you must send the lender a letter instructing them to close the line. If you fax the letter, keep a transmission confirmation. If you send a letter, send it as a recorded delivery and keep your receipt. Call the lenders customer service line after a few days to ensure that they received the letter of instruction.
Go online to the county website. Most counties have a public records search engine that enables you to view mortgage liens, satisfactions and other official documents. Most states require lenders to file a satisfaction of lien form within 30 to 60 days of the loan closing.
If your lender does not file a satisfaction of lien within the time frames established under state law, you should contact a real estate lawyer. Failure to release a lien can lead to damages payments.
Some states do not immediately update online public records. Check with the courthouse to find out how long the clerks normally take to upload records.