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Kim Courtney
Kim Courtney,
Category: Legal
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Experience:  Founder/Member at Food Business Association
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I took back a mortgage on a property in 1999 for ...

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I took back a mortgage on a property in 1999 for $7,500 for a term of 5 yrs. Client only paid about $2,500 after repeated attempts to collect and letter for Prepaid Legal Atty. The atty told me that the client could probably not pay and the process to collect would me more than the debt owed.   I decided to wait until the property was sold or refinanced because the mortgage is recorded.   I recently found out that the client did refinance.   However, the title company did not pay off the debt. I called the title company and they stated that the client told them the loan was paid and they accepted her word.   The title company states the only way I will get paid is to foreclose.   If this is so how do I start, or is there some other option without spending a lot of money.   Help
Submitted: 9 years ago.
Category: Legal
Expert:  Kim Courtney replied 9 years ago.

Hello, I am happy to answer your question.

You say that $4,000 is still due and owing. Are you collecting any fees on this? What does your loan document say, I assume you ARE allowed to foreclose? Also, I assume you have stated that attorneys fees and costs are to be added to the debt in such event?

Your options are these:

1) Go after the client in collection proceedings. There is no reason why you can't just start trying to collect this money. Again, be sure that you are adding all the fees that you can under the law. This could really add up.

2) Go after the title company for messing up the refinance transaction. Proof of paying off a loan does not constitute an oral statement. They were supposed to get written verification from you. The only reason why they didn't is because you are an individual and not a bank. This was not right on their part. You can bring a court action demanding the the transaction be revisited and that you get paid what you are due. I think this may be your best bet.

3) Foreclose. Again, you can put all the charges onto the debt, but you will still have to pay the lawyer and fees out of pocket in the meantime. It doesn't seem like it is worth it to me at this stage. Keep in mind, that EVENTUALLY this property will be transferred, and at the time, as long as you have your mortgage on record, you will get paid, if there is enough to go around after the big boy loans are paid off.

I hope this was helpful and good luck.


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