Bank couldn't find title

[Freedom]

This is a new one for me. A friend was supposed to settle last week. Settlement cancelled the day before because the bank could not find the title.
The bank is offering to pay the interest til the issue is resolved, (they are acknowledging they received it when the mortgage was originated). The purchaser has been offered the rent, which may hold them in. But this could totally scuttle a deal.
Has this happened to anyone else?
Should any intending seller request from their financial institution, a copy of the mortgage, and verification that it is accessible for settlement?

 

[asy]

Hiya Free.

Yes to both your questions.

I have heard of it happenning before.

But it's only a problem if a paper title has been issued.

If the vendor's solicitor has done their title search, that search will show up that a paper title has been issued, they should then ask where that title is.

If the vendor doesn't know where the title is at that stage it gives them time to sort out that problem. Or if it's at the bank, it gives them time to approach the bank and make sure it's available.

hope this helps,

asy

 

[Peter 14.7]

On this matter,

does the bank always hold the certificate of title? If the loan is paid off should it be returned? But would it be held is Xcollateral for other IP.

Or

Is Cert of Title all electronic nowadays?

Peter 147

 

[asy]

On this matter,

does the bank always hold the certificate of title? If the loan is paid off should it be returned? But would it be held is Xcollateral for other IP.

Or

Is Cert of Title all electronic nowadays?

Peter 147

No, it's very unusual for a paper title to be issued. IF there is a paper title issued, then yes, it should be returned when the loan is discharged. If there's X-col then the bank probably would keep it.

Mostly the certificates are not issued, and it's all done electronically. The bank will lodge a mortgage over the property and that will stop the title being dealt with without the bank's approval.

asy

 

[Ecogirl]

Freedom
The same thing happened to my folks with one of their houses. The bank (who shall remain nameless) lost all the documentation regarding one house and it caused a lot of stress. They found the folder but there was nothing in it apparently. Eventually they came to the party but it caused a lot of stress at the time.

The wonders of modern technology and QA.

Ecogirl

 

[handyandy]

Hi all

The title is relatively irrelevant as the title should have been on computer.

I have discharged a number of loans recently and the bank does not automatically send you the title and more importantly a discharge for the mortgage on the title, but waits until you request a discharge. At this point they send you the discharge paperwork which you then have to lodge.

Normally one never sees this process as the property would be used to raise further fund or in a sell and buy situation. In both cases someone else is handling the paper work.

Cheers