AYU: Releasing the Lien of a Deed of Trust (Dec 2023)

Releasing the Lien of a Deed of Trust

Presented by Kay M. Creasman

Over the last 20 years or more many of us have become comfortable having the owner pay a third-party company to track lien releases. But you need to remember the responsibility for making sure the lien actually is released is that of the settlement agent. When the settlement agent applies for the title policy they are certifying all of the requirements in the title commitment have been met.  One requirement is usually “pay and release of record” or even just “release of record” a specific deed of trust.

When using a third-party to follow up on releases the settlement agent has a continuing obligation to check the third-party website on a regular basis (at least monthly after 90 days past closing) and use the information provided to document each file as to where releases are recorded.  When the release hasn’t been provided within 4 months you might choose to contact the borrower/seller, or the seller’s attorney if he was represented by an attorney, to let them know the release hasn’t been obtained.  For those not represented by an attorney provide them with a copy of Va. Code §55.1-339. They can obtain a $500 payment from the creditor for failure to release within 90 days. They can write their own letter and ask the release be sent directly to the settlement company or the courthouse.

Regardless of whether you contact the borrower/seller or not, you must follow up with the lender to obtain the release. It’s your responsibility and one of the things for which you are paid.

If you have questions contact VAUnderwriting@OldRepublicTitle.com.