Bank will not satisfy mortgage, preventing me from resale

[Chris Policicchio]

Hello BP! I was hoping to get some help/advice. I purchased a SFH at the end of July. Closed on 7/27. My original plan was to rehab and flip the property, but as I approached my close date, it was apparent to me that I could just close and turnaround and quickly sell for a profit. So that is what I decided. Using my network, I actually received an offer on the property on 7/27 (the same day I closed on the property). The original owner (who I bought from) had a mortgage on the property. They used the funds from selling to pay off their mortgage. The mortgage company / bank is Midland Mortgage. Midland has sent the original owner a paid in full letter. However, Midland refuses to satisfy the mortgage with county until it has been 3-4 months. This means I could be stuck holding the property for another 2-3 months, when we were in a position to close on the resales by the end of August.

My seller wants a free and clear title.  We (my attorney who did the first closing) offered a letter of indemnification to the new buyer, but he refused.  I have been advised that legally I could force the buyer to close, with the letter of indem.  Obviously, I don't want to pursue legal action, but I'd really like to close and move on.  

Any thoughts, advice, or ideas?

Thanks!

Chris

[Jay Hinrichs]

this happens all the time.. the closing attorney who closed your deal without a recorded satisfaction or reconveyance deed what ever Is appropriate there is the one on the hot seat..  did he give you a title commitment with that exception ?

if he is paying it off he should have removed that from title.. as he ( your attorney who closed it paid it off)  Look at your title policy and see if that deed still appears.. in most states banks have 30 days or so to record the satisfaction.. you don't just get a letter from the lender.. there is a recorded document so its know to the whole world.. 

your buyer though is being picky.. unless he is also flipping it or his lender requires it before they will fund.  Keep in mind this is very normal.. at least half of real estate sold is paying off a mortgage of some sort..