When are private mortgages released? Construction Lien / 2nd mort

[Natalie Schanne]

When and how do you "release" a private mortgage with a payoff from a buyer? Does the escrow company handle this? Is it possible to get tricked into releasing it without being paid?

I have a construction lien on a property and the property is being sold and closing in about two weeks. The attorney for the property owner is asking me to sign and mail him a construction lien release discharge (saying the lien has been satisfied) BEFORE closing and I get paid. I don't see why I would ever do this. The property owners (LLC) tied up about $15k of my capital for 6 months by lying to me about wanting me to help them finish their flip. My claim seems equivalent to the process you would use for the lien release of a private lender first or second mortgage.

Who do I work with in the transaction to allow the sale to go through without a cloud on title, but also get paid? I don't want to block the sale. I don't have the name of the escrow/title company the property owner is using. (I asked the lawyer but got no reply.) I definitely don't want to send a signed and notarized construction lien release to their lawyer without cash in my bank or subject to escrow. Thank you for your advice!

[Patti Robertson]

I would ask the county real estate office. The people who record and release the liens into public record should be able to tell you.