A title problem can delay a mortgage even after income, credit and appraisal are approved. The lender needs an acceptable ownership and lien position. The settlement team needs the authority and documents to transfer the property and disburse the money correctly.
The useful response is to identify the exact title requirement, who can cure it and what evidence the lender and title insurer will accept.
Title review is different from the appraisal
An appraisal addresses value and relevant property characteristics. Title review addresses ownership, recorded interests, liens and other matters affecting the legal interest securing the mortgage. One doesn't replace the other.
A satisfactory value opinion can't establish that every required owner signed. A clear ownership chain can't establish the house's appraised value.
If someone says the property failed review, ask which review produced the issue. Appraisal troubleshooting has a different set of remedies from a missing lien release.
Find out whether it is a requirement or an exception
A title commitment or similar preliminary report can identify conditions that must be satisfied before coverage and matters excepted from coverage. Not every listed easement or recorded restriction makes the property unfinanceable.
Fannie Mae permits specified title exceptions under its requirements. The lender and title insurer must evaluate the actual matter and any needed coverage. You shouldn't assume every exception must be removed, or that the title insurer's willingness alone resolves every mortgage requirement.
Ask for a plain English explanation of the item and the exact document, payoff, endorsement or legal action required.
A paid loan can still have a release problem
You may have paid off an old mortgage while the public record still shows the lien. Proof of payment is relevant, but the title team must establish the acceptable release or other cure.
On a current sale, the payoff statement identifies money required to satisfy the debt. The release process establishes that the lien is removed or handled as required. Those are related steps, not the same document.
Mortgage payoff statements explains why the amount and date matter. If the servicer or prior lender no longer exists under the old name, the title professional may need to identify the successor or responsible party.
The seller must have authority to convey
Trust ownership, estates, entities, divorce history, name changes and powers of attorney can require additional records. The correct package depends on the ownership and state law.
A person signing because they handle the family's bills isn't automatically authorized to sell a property. A recorded deed or family understanding may not answer every authority question.
Have the title professional or closing attorney identify what is needed. If legal interpretation or a court process is required, the contract schedule should account for it. A loan officer can't resolve that by writing a stronger approval letter.
Additional liens change the money available
Hypothetical seller proceeds illustration: a $500,000 price, $310,000 mortgage payoff and $25,000 in other seller expenses initially suggest $165,000 net. A newly identified $18,000 lien that must be paid reduces that estimate to $147,000, before any further adjustment.
If the sale proceeds are funding the seller's next purchase, that $18,000 difference can also affect the next down payment or reserves. The title issue isn't merely paperwork; it changes the financing plan.
Don't assume every judgment or claimed lien attaches to every property in the same way. The appropriate title and legal review must determine the actual obligation and cure.
Liens left in place need priority review
On a refinance, an existing HELOC or second mortgage may need to be paid off, closed or subordinated under the new first mortgage's rules. Your low or zero line balance doesn't automatically remove its lien.
A subordination request needs the lienholder's cooperation and the new lender's acceptance. Get the timing and required documents early. A verbal statement that the line can stay isn't the completed priority review.
Don't close or draw on the line without coordinating the change. Either action can affect the transaction and documentation.
Keep the cure list specific
For each open item, identify the responsible party, requested evidence, payoff expiration and lender review needed. Ask whether the issue prevents signing, funding, recording or more than one step.
A small missing document can take longer than a large payoff if the authorized signer is unavailable. The amount of money involved doesn't reliably predict the time needed.
If the expected closing date moves, tell the lender so lock extensions, disclosures and updated documents can be coordinated.
Verify the final settlement instructions
Authenticate payoff and closing wires using trusted contact information. Don't treat a newly emailed lien payment instruction as reliable solely because the title issue is real. Payment diversion can exploit a genuine last minute problem.
Before closing, obtain confirmation that the required title conditions are satisfied or will be resolved through an approved settlement process. Keep the final documents and any post closing release records.
The objective is a financeable interest and a documented closing. A title issue is solved when the appropriate professionals accept the cure, rather than when everyone agrees the problem should be easy.
Common questions
What is a title search?
A review of public records to confirm the seller owns the home and to find any liens or claims.
Who pays to fix a title problem?
Usually the seller, since they must deliver clear title.
Do I need owner's title insurance?
It's optional, but it protects you from covered title problems found later.