Reducing Out of Compliance Lien Releases Update

As recently communicated, there is a widespread problem in the mortgage servicing industry arising from the failure of document custodians to provide the recorded mortgages in order to timely record lien releases in the respective counties. Although Cenlar orders the loan file from your custodian within three days of payoff, the custodians have either been sending us a file without the recorded mortgage, which is necessary to satisfy the lien, or not sending files in time to meet state law requirements for lien releases.

The failure of these custodians does not relieve either you or Cenlar from the obligation to comply with applicable law.  Therefore, Cenlar will utilize the following process to mitigate the problem of not receiving documents from your custodians

Lien Release Document Search Process

Each day we will review all pending satisfactions to determine which loans are eligible to be searched.  This list will be split between MERS MOM loans and non MERS MOM loans.

  • As stated in our prior advisory regarding the release for MOM loans, Cenlar has engaged the services of a vendor to search a repository of public mortgage documents (also referred to as a ‘Tier A search’) in an attempt to locate copies of recorded mortgages, at a cost of $4.00, as per a schedule we have developed to meet applicable state law requirements related to lien releases.  The search will occur on the 15th calendar day after payoff or on the 30th calendar day after the payoff date if the compliance period is greater than 30 days, whichever comes first.  For State Compliance periods that are less than 30 days, searches will be ordered in accordance with applicable state guidelines.
  • If a Tier A search fails to provide the necessary information to complete the Lien Release, and we have still not obtained the necessary documents, we will immediately proceed to an Advanced search which directly accesses the county records. Cenlar will charge a flat fee of $30.00 back to the client.
  • For non MERS loans, we will proceed directly to the Advanced search, and we will order searches, as per the schedule referenced above in first bullet, for the same $30 flat fee.

By the fifth business day of each month we will deliver a report detailing the cost associated with these searches, as well as a list of loans where the searches were unsuccessful in retrieving the required documents. This report will be delivered in the same manner you are receiving your Pending Satisfactions report.

In addition, we are modifying the existing Pending Satisfaction Report to add some valuable information.  In the near future a new report will be delivered to you on a daily basis.