First the good news: thanks to a very persistent phone campaign by the spouse, we have found the right Fidelity (in Wichita, KS) so the discharge papers can get re-generated as soon as my in-laws fill out the right permission slip and get it to them.
Yeah, it is unfortunate that they have to deal with this but I'm not sure you can entirely blame the mortgage company.
Why didn't they make sure this was taken care of back then?
Agreed - this is *not* completely the original lender's fault. That's why my opening line was basically 'make sure the paperwork gets filed completely'
(apologies, this got long - thanks for the free therapy
It's one of those 'modern world' quirks - responsibility (shared/if you want it done right, do it yourself or double check) and legality don't always line up exactly.
Title issues (paperwork ones, not actually cloud on title) certainly are quite common now that reality has set into the housing market & folks are actually paying attention to detail. Not sure title insurance helps here (or that it should) - there has been no loan since the one that was paid off in 2000, so their latest title insurance policy would have been at the origination of the loan in 1993 and wouldn't cover this issue? As to a seller's policy, the house isn't even on the market yet, that's slated for next spring. And any new seller's title insurance would want the paperwork in hand showing the loan had been paid off before they issued a policy. If I've got that wrong, let me know!
In other similar cases that we've been involved in, this original lender (and others) have been able to process such requests for missing paperwork. Which makes sense - if they couldn't, what bank/lender who bought a mortgage would have the basis to foreclose on anyone had missed filing the right items? So this case has been particularly trying. "Yes our records confirm receipt of payoff. No we can't give you any paperwork confirming that. No we can't tell you what company could."
I still wonder who sent who what, as my in-laws are the type that both keep every piece of important paper *and* know where it is (they have all the payoff info from their first loan, even though since it was paid off through a refinance that paperwork went to the new bank's lawyer). I wouldn't be too shocked if the buyer of the mortgage sent the originator the discharge to send to my in-laws, since the originator was still servicing the mortgage at the time of payoff. And if the originator then filed it internally, thinking this was just a courtesy as they no longer owned the loan and would have been transferring servicing as well.
We'll see about the assignment...obviously it's the selling bank that usually does that (sure, I bought that mortgage & yes they paid it off, wink wink - that could lead to some issues!) but worst case there is something with a name like 'affidavit of missing assignment' that can be filed.