Real Estate Law
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Hello and thanks for submitting this question. You are in a legal never, never land regarding the mortgage lien. Apparently the person who you dealt with did not have sufficient authority to record a satisfaction of mortgage. While your tax sale title might eliminate the right of lender to foreclose a mortgage, it doesn't require the lender to actually remove it. Catch 22 is: the lien can't be enforced by foreclosure (against a tax sale defense ) after it has been eliminated by a tax sale, but it is still of record. Title insurers will usually require a quiet title suit to remove liens after a tax sale.
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I'm not sure if a satisfaction piece was recorded. I never recieved a letter I was given that information over the phone. I recieved an email from the bank that said the tax sale takes precedence over the mortgage and have the county contact them about a lien release.
The County Recorder can tell you if a satisfaction was recorded or not. If it has, no problem. If not, then the bank can stand pat and force you to file to quiet title. The bank still has the right to challenge the tax sale on technical grounds and many times they do and win. That's why you can't get title insurance until that step is taken if they don't release voluntarily. I don't know how much money is involved, or how much they said they would take to settle. That is an option that you have to weigh. You might check with a local real estate attorney and find out what they charge for an uncontested QT suit. You can pick whichever way is cheapest and quickest.