Imagine trying to refinance or sell your home, only to discover that a mortgage you paid off years ago is still showing up in the title search.
This happens more than many people realize. However, the fact that an old mortgage appears in a title search doesn’t automatically mean it remains enforceable.
When does an old mortgage become unenforceable?
Georgia typically uses “security deeds” rather than traditional mortgages. When a loan is paid in full, the lender generally has 60 days to furnish the necessary cancellation documents for recording.
What happens when that never occurs? Under Georgia law, a title conveyed through a security deed generally reverts to the property owner seven years after the loan’s stated maturity date. If the deed doesn’t specify a maturity date, the seven-year period generally runs from the date of the deed.
There are some exceptions. Certain security deeds containing language establishing indefinite security interests may remain effective longer. Properly recorded renewals or affidavits can also extend the applicable period. This means a security deed may have lost its legal effect even though it still appears in the public records.
How can you resolve an old mortgage issue?
If a title search uncovers an old security deed, the next step is determining whether it remains enforceable. Depending on the circumstances, resolving the issue may involve:
- Determining its maturity date and whether the statutory reversion period has expired.
- Looking for recorded renewals, affidavits or other circumstances that may affect the reversion date.
- Contacting the lender or its successor for the necessary documentation if the loan was paid off.
- Taking the necessary legal steps when the records don’t adequately establish that the lender’s interest has ended.
In some cases, it may be necessary to pursue a quiet title action to resolve uncertainty about ownership. A Georgia real estate attorney can review the property’s chain of title, determine whether the lender retains any enforceable interest and identify the steps necessary to clear any remaining title issues.