Posted by John Merchant on November 06, 2002 at 23:49:43:
Interesting, but not so simple as you seem to think to get rid of the lender’s interests. Nothing you could sign or file today would be effective in getting rid of the lender’s rights.
The actual note holder could turn up any day and demand the balance owed on their note. They have to concern themselves with the Statute of limitations in your property’s state, as they lose the right to collect after the SOL runs on a written contract…but only as each payment comes due.
In other words, in a state with a 4 year SOL, they’d lose the right to make you make a payment 4 years after it’s due. So they’d lose the right to one payment each month, after it was overdue for 4 years.
But all those delinquent payments not yet 4 years old would survive and the note holder would retain the right to collect those.
If nobody ever comes forward until all the note payments have become due, and the entire note has matured, and the SOL then runs, then you might indeed end up with the property F & C of the lender’s note balance.
At that time, should you never have heard from the lender, you’ll probably need to file a Suit to Quiet the Title, present your evidence in the court, and then ask the judge to grant you a judgment finding that you own the property F & C of the lender’s lien. The judge could then enter a judgment to that effect, which you would record in the deed records, and then be able to get total ownership of the property.
Meanwhile I think you had better stand ready to make up the overdue payments on the note, should the note holder show up and demand you pay them. You’d have a good case for making them redo the note so as to avoid having them foreclose on you, but they would have the right to be paid on yout debt to them.
If you tried to sell the property today, you’d have a problem because you don’t have a complete title, and you could only sell it subject to the lender’s lien interests.