Help! My funds are being withheld

Just this morning we received an inquiry from a seller who discovered an old home equity line of credit was still open from a bank that had since merged several times.

The seller had no paperwork for such a loan or any recollection of taking out a home equity line of credit. We expect a previous owner took out the loan, and the loan did not appear on the public records at the time of closing.

Now the seller has been informed the closing attorney (at another title company) is withholding funds because of a lack of certificate of satisfaction for the home equity line of credit. The seller was Googling for information on what to do, found our website and shared this story via our new chatbot.

What can a seller do in a situation like this?

We have shared similar stories recently involving HELOC fraud and the costly bond off. We suggested this seller first review the closing documents from when the property was purchased years ago to see if there’s an owner’s title insurance policy.

Owner’s title insurance would protect this seller from financial losses as well as any cost incurred to cure title, so it is marketable – so the property can be sold.

Fingers crossed for this individual. If there isn’t an owner’s title insurance policy, this seller will have to personally take charge of contacting a company to clear title and endure the costs to pay off any unexpected liens before a new buyer can legally take ownership of the property.

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