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Question DetailsAsked on 10/23/2016

How long can a title company hold money on your escrow account and what provisions need to be taken to protect thes

I closed on a home equity loan over three weeks ago. Contingent to a letter from the from the company removing a lien, that was paid in fill at Closing, The title company is refusing to release the remaining escrowed funds to me. The company which I owed money to and filed a lien on my property has received payment and indicated such online, which the title company can view. I cannot get the title company, Nautical Title, to return my calls or emails. PLS HELP. Thank you

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You would have to check state law on that - generally they have 3-10 days from receipt of final paperwork confirmation to complete payments, though on a real estate transaction with a formal "closing" the Seller or his agent should get payment (or funds transfer) at closing - or next business day if closing was too late to meet banking hours or on a weekend (rare). In this case - uyou do not know if they are holding up on the payment to you, or have not received the notarized lien release yet - sounds like the latter, so could be the lienholder is the holdup.

The title company will not believe an online statement - they need a (probably notarized and maybe recorded) lien release from the party you paid off.

Sounds like maybe an iffy title company - because the loan should not have "closed" until they had the lien release in hand, unless you mean part of the home equity loan paid off the lien - in which case typically they would have gotten an uncertified lien release from the lien holder, and paid it off and certified it as paid with the home equity loan money, then immediately after lien release recording (next business day typically, sometimes same business day) sent the lien payoff to the lien holder and released the remaining funds to you. If the lien holder refused to authorize them to receive payment on their behalf under escrow, then the escrowed equity loan funds should be released within the legal number of days after receiving the lien release from the lien holder - a poor situation because it puts you at the mercy of the lien holder to issue a lien release. This should NOT be done outside of escrow unless the lien release is exchanged hand-to-hand with the payment, because it leaves the lien holder with his payment but you out in the cold if he does not send the lien release in a timely manner.

The thing I can't figure out is why you went with a title company for escrow - normally the lending bank would have had you sign the loan paperwork final, paid off the lien and recorded the lien release, then closed the loan with you through their own escrow department - usually all in a few days to a week or so depending on whether the lien release had to be sent FedEx from out of town or not.

I would ask to talk to a supervisor (or go to their office if local) - and if they will not respond talk to the state agency which licenses them in your state - sometimes a title like Department of Commerce or such Business or such, sometimes the Lieutenant Governor's Office or Secretary of State or such. You could also talk to the home equity lender (assuming this is a local bank or such, not a web lender of something like that) who might put pressure on them - escrow companies live or die by their relationships with the lenders, and get a bad name with a lender and they can lose a lot of business referrals.

One other thing - I did a quick web search on Nautical Title to see if they have a lot of complaints - couldnot find ANYTHING on the webv about such a company - are you sure this company exists and is not just a sophisticated scam to get a lien or deed of trust on your property ?

Answered 3 years ago by LCD

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