Arranging a Mortgage Discharge: How to Find Out Who a Private Mortgage Holder Is

As a lender, there are key points in time when validating information can help you uncover an issue with your deal that could prevent it from closing. The top 3 deal killers: undisclosed people on title who won’t sign, less property value than anticipated, and higher balances on registered encumbrances than anticipated.

The operational savings to a lender’s underwriting department when issues are identified with deals sooner are exponential. This is why having a look at the encumbrances registered on a property is a good step for a thorough underwriter.

With regard to encumbrances to the title of the property, these may sound familiar:

• A mortgage where the discharge amount is far higher than anticipated
• Undisclosed mortgages on title
• Undischarged mortgages

Private mortgages can be extra challenging because even if the name of the lender comes up when searching the property, how can you obtain their contact information? For example, if Home Trust has a mortgage registered on a home, you can look up their telephone number easily. However, if Jane Doe has a mortgage registered, that info may be less accessible.

The best steps that you can take to position yourself to contact a private lender and directly request a discharge statement are as follows:

1. Run a search in Purview For Lenders to see if any encumbrances are revealed
2. You can then use Teranet Express to request a Parcel Register.* This will give you the “Instrument Number” associated to each registered encumbrance.
3. Using the instrument number you can purchase an Instrument Image which will almost always reveal the name and contact information for the real estate lawyer who represents the private lender and who likely registered the mortgage.
4. From here you can proceed to request a discharge statement.

Having the broker require that their client sign a consent form for you to access information from 3^rd parties is also helpful. If a tax lien or other third party lien comes up, they will not provide you with information without the client’s consent.

It is always best to identify encumbrances and request your own discharge statements. Once a lawyer is engaged you are likely far down the priority ladder in the underwriting process and out of pocket expense may have occurred.

If you are working with a private lender, get the most information possible, at the very beginning, to avoid issues when it comes time to close. Purview For Lenders can help uncover encumbrances, thereby saving you time and money down the road. Call us today for more information: 1.855.787.8439.

*An official product of the Ontario government pursuant to provincial land registration statutes.