Title Tips: Searching for Lenders

You may have transactions from time to time where an open mortgage on title was made to a lender that is no longer in business. In those cases, you must find out what became of that lender’s outstanding assets to determine where to go for a payoff letter or release. If you can verify that the lender of record was bought by and merged into another lender, or that it failed and its assets were acquired by another lender, then you can find the party with a right to give a payoff letter or issue a release of mortgage. Generally, when there is a bank merger or failure, nothing will be recorded in the Recorder’s Office, nor will those events be listed at the Illinois Secretary of State’s website.

Instead, information concerning the identity of lending institutions and their history of acquisition, merger, or failure, is maintained by the Federal Reserve System. You can search this information, using the name and location for the lending institution at the National Information Center’s website. This website contains reliable information about a lending institution’s history and allows you to print your search results for inclusion in your title file.

As always, if the mortgage has been assigned, then you must have a copy of the assignment for your title file to obtain a payoff letter or release from the assignee. Information from the MERS system is sufficient in lieu of an assignment, if the mortgage was a MERS mortgage.

Questions? Contact an Underwriter

Posted on: Mon, 11/04/2013 - 8:00am