Escrow & Title
When appraising title in Mississippi, an examiner discovers an old mortgage from 1985 that was never formally released. This is a:
AMinor administrative issue that does not affect title
BA cloud on title that must be resolved—typically by obtaining a release or a court order—before clear title can be conveyed✓ Correct
CA lien that automatically expired after 10 years
DOnly relevant if the original mortgagee is still in business
Explanation
An old, unreleased mortgage (even if the debt was paid) remains a cloud on title until formally released. The buyer should not proceed without a proper release or satisfaction of the old lien.
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Key Terms to Know
Lien
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Chain of TitleThe sequential record of all transfers of ownership for a piece of property from the original patent holder to the present owner.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
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