Mortgage Refinances FAQs ***
Q. Do I need an attorney to represent me when I refinance my mortgage?
A. YES, but as an attorney, my opinion is biased. It's always a good idea to have an attorney review legal documents before you sign them. However, mortgage documents are standardized and provided one is dealing with a reputable lender, which may or may not be the same lender with whom their existing mortgage is with, they may not always feel it necessary to retain the services of an attorney. Keep in mind that there may be issues with the title to your property that, though technically you might be able to resolve yourself, you would most certainly spend an inordinate amount of time figuring out or muddling through. Examples where you might consider the services of an experienced attorney are to resolve issues such as previously-paid mortgages that are still showing "open" of record because of missing or mis-indexed satisfactions of mortgage(s), missing or mis-indexed mortgages, assignments of mortgage(s), or Consolidation Extension & Modification Agreements (a/k/a CEMAs) that need to be corrected in order to further consolidate, or open/active violations with the Environmental Control Board (ECB) or Dept of Buildings (DOB).
Q. I'm refinancing and I thought you were my attorney. The bank told me I could get my own attorney or else I could use their attorney (you). And, since I'm paying your fee, you must be my attorney.
A. That's not really not so much a question as it is a bunch of statements. Anyway, hopefully you misunderstood what the bank's representative said, because I would hate to think they misled you. Simply stated, just paying my fee does not make me your attorney. As part of the typical refinance, you have the honor of paying all the bank's fees, including the fees associated with their title insurance, searches, and, of course, for their attorney (me). But, that does not mean that I won't do my best to answer all your questions and point you in the right direction if and when issues arise. However, while I certainly don't mind holding your hand (not literally) through the process of refinancing your mortgage, there may come a time when I do suggest that you retain independent counsel. Typical examples of situations where I might make such a suggestion are included in my answer to the previous question. Please remember, of course, it's in my best interest to work with and to help you as much as reasonably possible since I might impress you enough that you do retain me to represent you in the future. Over the years, a large portion of my client base has come from former borrowers who thought to call me when they needed a lawyer for something else.
Q. (1) Why do I need an original Satisfaction/Discharge for XYZ Mortgage when I paid that off XX years ago? (2) I have a photocopy, isn't that good enough? (3) You're my attorney for this refinance, it's up to you to do the work for me to obtain a Satisfaction, right?
A. (1) Because it's showing "open" as a lien against your property. Normally, once paid-off, a lender sends an original Satisfaction of Mortgage to the borrower's attorney or title company to send it for recording. Sometimes, the lender may send it directly to the County Clerk for recording. Occasionally (dare I say, "frequently"), these Satisfactions do not make it to the Clerk's office and/or they may be incorrectly indexed against the wrong block and lot number. The County Clerk keeps track of mortgages (liens) against real property. When you give someone a mortgage (borrow money against your house) the Clerk enters that information into a database for the world to see. If you pay that debt but the lender doesn't authorize the Clerk to remove the entry from the database, it shows "open" - whether you owe money to that lender or not. A Satisfaction of Mortgage is the document that authorizes the Clerk to remove the entry. (2) As a legal document, a Satisfaction must be signed and notarized. The Clerk simply will not accept a photocopy and that's why you need to obtain an original or duplicate original, as the case may be. (3) Well, MAYBE.. it depends. Am I your attorney? If so, then YES. But, are you sure I'm not just your new lender's attorney? If I am your lender's attorney, I will do my best to help guide you (see the above Q/A's) and offer some help, but rest assured you will most certainly be responsible for some of the work, which will include a lot of time tracking down the lender's successor (in cases where the original loan was assigned and/or lenders merged) and a lot of time (hours?) "on hold" with the lender trying to reach the right person and then convincing them to help quickly.
Q. Why do I need to purchase "certified" copies of my old mortgage documents in order to close my new loan by assignment? (I have copies of those documents and they're also available online!)
A. In short, in order for your new lender to accept the assignment of an existing mortgage and note, the old lender must have the "original" documents they're assigning. Typically, this includes prior note(s), mortgage(s), assignment(s), and consolidation/extension agreement(s). Without all the underlying documents, your loan cannot be assigned. Luckily, many lenders will accept a "lost note affidavit" for lost notes, and almost all lenders will accept copies of the recorded documents that have been "certified" by the County Clerk. Of course, that service will cost you money, but it usually beats the alternative (not closing by consolidation or extension).
Q. Can we close this loan at my house? Can we close this loan on Sunday afternoon? Can we close this loan on Christmas Day?
A. GENERALLY, NO. Well, as far as Sundays and holidays, that's a definite NO; as far as at your house or some other mutually agreeable location, MAYBE. As much as I would like to accommodate your schedule and knowing that most people cannot afford to simply miss a day of work, a mortgage closing is a significant event and the reality is it should only take an hour. If you absolutely cannot be at my office or a local branch of the lender during normal business hours, let me know your specific situation and we'll discuss it further.
*** Copyright (c) 2012 Peter J. Weinman, Esq., all rights reserved. Use by permission only, with proper credit..