Ideally, lenders will double and triple check everything before filing a formal mortgage record. Unfortunately, mistakes do happen, and an error on your mortgage record can hinder property transfer, bankruptcy proceedings, and the refinancing process.
Most Common Mistakes
Anytime someone inputs new information into a system, a mistake can happen. The property owner may improperly fill out the paperwork or misspell a name. A lender may fail to notice a mistake or make one him or herself. The records office responsible for filing away deed and mortgage information is often responsible for minor mistakes that cause problems later.
The most common record-related mistakes include poor timing of document submission, poorly executed documents, and erroneously indexed documents. Something as simple as improper notarization could cause problems. At worst, an error could render the entire mortgage void in court, leaving a property legally open to another purchaser.
Correcting a Mortgage Record Error
If your mortgage record is filed, you cannot “unfile” it, correct it, and then resubmit it. However, you can amend the record with a corrective or newly executed deed or mortgage.
This type of record filing allows property owners to reaffirm information in the preexisting document while correcting any mistakes that were previously made. Depending on the state, property owners may need to go through a slightly different process to create and resubmit a formalized document.
In some states, the courts will allow property owners to file an affidavit of correction or scrivener’s affidavit for clerical and other minor errors. This type of amendment differs significantly from a full corrective filing, and some property owners may find the process of filing an affidavit simpler than encouraging a lender and an attorney to re-open and correct the original deed.
However, an affidavit may not have the same legal protections as a newly executed corrective document. For instance, in some states, the courts have determined information included in an affidavit, such as a particular parcel of land, may not be secured under the original mortgage. When filing for bankruptcy, this type of error can hurt both a lending organization and a property owner.
Every jurisdiction is different. Your local property records office or a property records database may help you understand the rules and requirements in your area. Always have an experienced attorney create or review your submission, and take every step possible to secure the legality of the change in the formal record. For example, always include both grantor and grantee signatures on corrective submissions to ensure the validity of the filing.
Timing Is Important
Whenever you initially file a mortgage record or corrective document, make sure you meet all the appropriate deadlines for document submission. Failing to file every required document may result in its exclusion from the formal record.
Simply mailing the documents to the court before the due date may not be enough to prevent errors in indexing or 3rd party fraudulent filings. In some jurisdictions, an opened set of documents that was hand delivered may take precedence over an unopened mailing. Consider taking your documents to the courthouse personally to eliminate the likelihood of this type of error.
Technology Improves the Rate of Record Errors
The antiquated filing system used in most jurisdictions creates room for errors that can be difficult to address. Many states have started to implement technological solutions to cut down on the number of errors in mortgage and deed filings. For instance, in New York, property owners in some jurisdictions are given a notification any time the state receives a document associated with the property title or mortgage. Any property owner who takes action after receiving a notice may avoid the process of filing a corrective document.
Ultimately, as more record offices start using databases, lenders, property owners, and legal counsel will have the ability to change information before it becomes part of a permanent record. In addition to reducing the number of simple errors, this type of automation may also reduce abuses such as fraudulent filings.
Avoiding Records Errors in Mortgages
A mortgage error may not effect a property owner’s mortgage payments or property usage in the near future, but one simple mistake can cause problems if a property owner files for bankruptcy or sells the property at a future date. Carefully examine the documents for mistakes prior to filing.
Trust your attorney, but double check the actual information in your mortgage and on file with your lender before anything is submitted to the records office. If possible, hand-deliver the mortgage record to the records office, and take advantage of your county or state’s technological record keeping tools. Always keep a clear record of dates and copies of your submission for future reference.