Removing a Lien on a Bankrupt Financial Institution

[Anonymous]

So, we purchased a mobile home in 1997 and it was financed through Greentree Financial. Well GreenTree Financial went bankrupt and their accounts were taken over by Conseco Financial. In 2003 we refinanced this home through US Bank, however, whenever that was done apparently US Bank never got a CLEAR title on our mobile home.

So, we are trying to refinance this now with US Bank, however, they said they can't do it because the title isn't clear and still shows Greentree Financial as a Lein Holder even though US Bank paid this off in 2003. 

Well, Conseco took over the accounts from Greentree and then Conseco went Bankrupt as well, which was acquired by DiTech. HOwever, DiTech said that they only acquired ACTIVE accoutns from Conseco and since it was closed prior to DiTech acquiring them, that they can't do anything about it. 

So, both Greentree and Conseco are bankrupt, noone to talk to, Conseco new company says all they do is Insurance stuff now, nothing with mortgage or anything.....so, how am I supposed to be able to get this lein released from companies that are bankrupt now?

[ShanetheMortgageMan]

The title company handling the previous transaction in 2003 which paid off Greentree should be able to assist.  Do you have the closing paperwork (Final HUD-1 settlement statement) from that refinance?  If so, it should list the title company who handled it and you can reach out to them.  US Bank may even accept the Final HUD-1 from 2003 as proof it was paid off.  There was an article in Business Insider awhile back that had this same topic.

[Anonymous]

Well, US Bank is the one we are refinancing with and the one saying they can't do it because it isn't clear.

The problem with getting a hold of the other company is, they have went Bankrupt and are no longer a company.

[ShanetheMortgageMan]

I understand you cannot get a hold of the previous mortgage company, obviously that cannot be done.  You need to work with the other parties that were involved in that transaction (the title company & US Bank), take initiative and reach out ot them.  Connect the dots for them, get a supervisor involved, etc.

[Anonymous]

We have been trying that with US Bank now for 6 months, they aren't doing anything about it becuase our sitaution is unique, we are trying to refinance to pay off another US Bank property, so to them it isn't urgent so they can keep getting both mortgage payments, which is what sucks. 

Now, you think another third party would be a title company?

[ShanetheMortgageMan]

US Bank doesn't really care if you pay them off or not, either you pay them off and they regain that ability to extend new credit to someone else... or you keep paying the monthly payments and they make interest off your loan.  Usually after the first few years of a mortgage lenders would prefer you to pay their loan off because the majority of profits are made in those initial years, with the lion's share from the fees made during the origination process.

You basically need to say the following to US Bank... "You did our refinance back in 2003 and it was based on the existing trust deed with Greentree being paid in full and satisfied at closing, which it was paid in full and satisfied, but the company failed to record a reconveyance and that is why their trust deed still appears on our title.  You wouldn't have funded the loan in 2003 if Greentree wasn't paid in full, a new loan from Greentree wasn't put on title after your refinance, so it's logical the trust deed on title is the one that was paid off."   They may or may not get the point.

Either way, as I mentioned, there was a title company involved and that title company should be able to confirm they paid Greentree in full.  Your situation isn't that uncommon, mortgage companies go out of business all the time and title companies are used to dealing with issues like these.  Look through your paperwork to find out who that title company was and reach out to them to explain the issue and what you are looking to accomplish.  Odds are they may even be the same title company that US Bank is using for the new proposed refinance as well.

In situations I've dealt with, we just supply our title company with a copy of the final settlement statement that paid off the trust deed and usually that is sufficient for them to remove it from title.  It's not a permanent solution but it solves it for that specific transaction.

Another route you can take is to reach out to the county recorder-clerk's office and ask how they deal with reconveyances for trust deeds from companies that are no longer in business.  They might not be able to make things happen for you, but could give you some insight on how the county handles these matters.

[JVille]

I’m going TO SAY THIS IN BIG BIG LETTERS.....

The TITLE COMPANY IS RESPONSIBLE FOR CLEARING THE TITLE, US Bank and the Title Co. please contact the title company who handled the transaction they will be able to fix this. In fact you PAID THEM TO DO EXACTLY THAT. The title company was responsible and can fix this.

[NC_Mtg_Loaner]

Shane and J-Ville are on the money here for sure...

this is a responsibility of the Title Co. from the 2003 deal.   If you still seem to be getting nowhere though, perhaps a call to your local state's Attorney General might help unless you have a lawyer on retainer that could help.

[JVille]

The Title Company involved (god I hope there is one involved) will pull their old deal file and figure out what went wrong. Hopefully this was not just a dealer transaction and went thru a Title/Escrow.
They know how to deal with the Out of Business Lenders and who can legally sign off as this is more frequent than you know.