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  1. #1
    Join Date
    Oct 2005
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    North Carolina
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    2

    Default What If the Mortgage Isn't Paid Off out of the Escrow

    Theoretically,

    What if I bought a house subject to the existing mortgage of $200,000...then sold it conventionally for $225,000...then when I went to close with my buyer, attorney issued me a check for $225,000 (less closing costs). This would tell me the attorney did not do a full title search because, had they, they would have found the existing $200,000 mortgage and it would have been paid off, then I would have been issued $25,000.

    So if this really did happen, who would have to pay off that mortgage?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Undetected Mortgage

    The buyer would have to pay off the mortgage, and would presumably make a claim against their title insurance. Ultimately, somebody would almost certainly sue the seller for fraud, unjust enrichment, and/or some other tort.

  3. #3
    Join Date
    Oct 2005
    Location
    North Carolina
    Posts
    2

    Default

    fraud? how so?

    Thanks for your input

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