Legal Question in Real Estate Law in Indiana

mortgage and title company

I refinanced my home and the title company had already released the funds without a payoff. They went by my last mortgage statment for the payoff. they sent my old mortgage co. the payoff. they refused the payoff because no one had faxed a request for the payoff. The title co. called and said the reason for the refusal,was because there was a early payoff penalty, I could not remember if there was a penalty, its been two years. The title co. said i owe $5,000.00, for the penilty if I would have known this I would not have signed the papers. I want to know who is responsible, for the big mistake. The co. I refinaced with has already sold my mortgage to another co. and they probably aren't aware of this problem. I have been so upset about this problem, that I have been haveing chest pains, because I have a heart condition, I want to know what my legal rights are in this matter. The old mortgage co. is still taking payments, and the new co.'s payments will start the 1 st. of july. I cannot make both payments at the same time, I am really upset. Your advice would be very helpful, Thank you!


Asked on 6/15/05, 6:09 pm

1 Answer from Attorneys
C. David DuMond Law Offices of David DuMond

Re: mortgage and title company

You are entitled to rescind the entire transaction, for these reasons: you agreed to a refinance that would pay off the first mortgage; you would not have done the transaction but for that; you didn't get a payoff.

Assuming the title company was instructed by the new mortgage company not to release funds without a release of the old mortgage, then the title company is liable to the new mortgage company for obtaining a release of the old mortgage. The new mortgage company will be in a junior position until the first mortgage is released. Your best remedy would probably be for the title company to take care of the new mortgage company. So, I suggest you contact the title company and ask for their plan to remedy the problem. Tell them if you are not completely released from all obligations to the old mortgage company, you will get a lawyer and sue them for all your economic damages and your emotional distress. You may need a lawyer, anyway, to make sure everything goes smoothly, so ask your county bar association for a referral to someone with experience in real estate litigation. Good luck.

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Answered on 6/16/05, 6:13 am


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