Mortgaged Property

Is purchasing a mortgaged property safe? Here's what to watch out for when purchasing a bank-loaned property.

Before, I would quickly tell you it was. Just pay the bank, the bank releases the title along with the cancellation of the mortgage, and the parties can close the deal. But it seems banks have become more strict in releasing the title.

One bank is straightforward and has the text "all related past due accountabilities need to be updated/settled first before the release of collateral documents" written as a condition.

Then, recently, I encountered another bank that requires the settlement of ALL RE mortgages before any title release–even if the mortgagor is up-to-date with all his payments.

Then there's another bank that refused to release the title because the mortgagor's son was in arrears with his car loan. They required the car loan to be settled. But aren't they two separate entities?

Lesson:

In any case, it would be prudent to communicate directly with the lender to know what the conditions are for title release.