How title problems stop closings and how to fix them
When a mortgage lender reviews a property, they require a clear, marketable title before releasing funds. Title issues create legal or financial claims against the property that make a lender unwilling to take the lender’s lien position. In my 15 years helping buyers, sellers, and lenders complete closings, the same handful of title defects repeatedly causes delays or cancellations. Below I explain the most common problems, why each blocks closing, practical resolution steps, likely timelines, and who typically pays.
Most common title issues that block mortgage closings
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Liens (tax liens, mechanics’ liens, judgment liens)
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Why it blocks closing: A lien is a legal claim against the property for unpaid obligations. Lenders won’t accept collateral that can be seized to satisfy another creditor without their lien being subordinated or paid off. (See IRS resources on tax liens: https://www.irs.gov/)
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Typical fix: Obtain a payoff or release from the lienholder; negotiate payoffs or subordinations; the seller usually clears these before closing. For tax liens you may need a certified payoff or a lien subordination/withdrawal from the taxing authority.
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Timeline: Days to several weeks depending on creditor responsiveness and whether negotiated payoff plans are required.
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Unreleased mortgages or reconveyances
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Why it blocks closing: An old mortgage that wasn’t properly released appears as an outstanding debt on the title.
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Typical fix: Request a reconveyance or lien release from the prior lender; in some cases, a recorded satisfaction needs to be obtained from the county recorder.
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Timeline: Often 1–3 weeks if documentation exists; longer if the prior lender is insolvent or difficult to reach.
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Errors in public records (misspellings, incorrect legal descriptions)
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Why it blocks closing: Clerical errors can create ambiguity about the exact parcel or ownership and can invalidate title insurance coverage for that issue.
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Typical fix: File a corrective deed, affidavit of identity, or court-ordered correction. Title companies can often prepare corrective documents for recording.
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Timeline: Usually 1–4 weeks; court corrections can take longer.
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Missing or forged signatures on past deeds
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Why it blocks closing: A missing signature can mean the chain of title is incomplete; a forged document can cloud the record and raise fraud concerns.
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Typical fix: Obtain a corrective deed or a court quiet-title action to establish clear ownership. For forgery, insurers/lenders may require a more formal legal resolution.
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Timeline: Corrective deeds can be quick; quiet title suits can take months.
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Heirship or probate disputes
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Why it blocks closing: If a prior owner died without clear probate or conveyance, multiple heirs may claim ownership, creating legal uncertainty.
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Typical fix: Complete probate, obtain heirship affidavits, or secure a court decree clarifying ownership. A title company may issue exceptions until probate is resolved.
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Timeline: Weeks to many months depending on court schedules and complexity.
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Boundary disputes and survey exceptions
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Why it blocks closing: Disputes over property lines may affect the usable area of a parcel and the lender’s collateral value.
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Typical fix: Order a current survey, negotiate easements or boundary agreements, or resolve through mediation/court if necessary.
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Timeline: Surveys can be done in a few weeks; legal resolutions take longer.
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Easements and rights-of-way not previously disclosed
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Why it blocks closing: Undisclosed easements can limit how a property is used and affect value. Lenders must understand encumbrances before funding.
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Typical fix: Obtain recorded easement documentation and request appropriate title endorsements; if the easement is unacceptable, negotiate removal or modification.
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Timeline: Days to weeks, depending on the other party’s cooperation.
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HOA assessments and special tax liens
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Why it blocks closing: Homeowners association charges and certain municipal assessments can become liens that must be resolved for clear title.
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Typical fix: Secure payoff statements or govern the sale so the seller pays outstanding assessments at closing.
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Timeline: Typically resolved as part of closing if disclosed early.
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Fraud and identity theft on title
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Why it blocks closing: Evidence of title fraud — e.g., forged deed transfers — creates significant legal risk and will stop a lender from funding.
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Typical fix: The title company’s fraud unit may investigate; a claim on the title insurance policy or a court action (quiet title) may be necessary.
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Timeline: Often lengthy; depends on investigation and litigation.
Title insurance, preliminary reports, and the title search (how they fit together)
Before closing, a title company performs a title search and issues a preliminary title report or title commitment that lists both covered matters and exceptions. That report is your early warning system.
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Preliminary title report: Identifies current liens, recorded documents, and exceptions. If you see liens or unresolved encumbrances on the preliminary report, those are typically closing blockers. Learn more about preliminary reports in our glossary entry on Preliminary Title Report.
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Title insurance: An owner’s policy protects buyers against covered defects discovered after closing; a lender’s policy protects the lender’s priority lien. Title insurance does not automatically remove existing defects; it provides financial protection and, in many cases, legal defense if a covered claim arises. For policy details and the differences between owner and lender policies, see our Title Insurance guide.
(Internal links: see Title Insurance and Preliminary Title Report.)
Practical, step-by-step checklist to prevent title delays
- Order the title search as early as possible once your offer is accepted.
- Review the preliminary title report immediately on receipt; flag any liens, judgments, or exceptions with your closing agent and attorney.
- Require payoff letters for mortgages and recorded liens; ensure funds and release procedures are in place.
- Ask the seller for executed affidavits (e.g., marital status, no-known-liens) and signed corrective deeds if minor errors exist.
- Obtain a current survey when surveys are required by your lender.
- Buy lender and owner title insurance; consider endorsements (survey, encroachment, access) useful for your situation. See our Title Insurance glossary entry for deeper guidance.
- When complex issues arise (heir disputes, fraud, quiet title), involve a real estate attorney early.
Who usually pays to clear title issues?
- Seller responsibilities: Most recorded liens created during the seller’s ownership (unpaid taxes, second mortgages, mechanics’ liens from seller’s work) are typically cleared by the seller as a condition of sale.
- Buyer responsibilities: Costs tied to additional protections requested by the buyer (e.g., survey costs, optional endorsements) are often negotiated in the contract.
- Lender requirements: Lenders typically require a lender’s title policy and may insist on certain endorsements; the buyer often pays for the lender’s policy though local custom varies.
Typical timelines and escalation paths
- Fast fixes (1–7 days): Recording clerical corrections, obtaining payoff letters when creditors are responsive.
- Moderate fixes (1–4 weeks): Clearing recorded liens with payoff and release, securing reconveyance from prior lenders, obtaining missing signatures via corrective deeds.
- Complex fixes (1–6 months+): Probate, quiet-title actions, resolving forged documents, unresolved heir disputes.
If a title issue threatens a closing date, ask the title officer and lender for a specific conditional plan: what exceptions the lender will accept temporarily, what evidence (e.g., recorded releases, escrow holdbacks) will permit funding, and whether the lender will issue a conditional commitment.
Real-world examples from practice
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Unpaid contractor lien: A buyer discovered a mechanics’ lien filed by an unpaid contractor. The seller negotiated directly with the contractor to secure a lien release, funded from seller proceeds at closing. The delay was two weeks.
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Heir dispute: A decedent’s property passed informally among family and no probate was completed. The title search showed multiple recorded conveyances with inconsistent vesting. We required a probate decree and an heirship affidavit; the court process stretched the closing by months.
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Clerical error in legal description: A single incorrect lot number in a historic deed produced a survey exception. The title company prepared a corrective deed and secured the recordation; the issue closed in about 10 days.
When to involve professionals
- Real estate attorney: Required for quiet title suits, complex heir disputes, or contested deeds. Even when not mandatory, an attorney reduces risk and speeds legal solutions.
- Experienced title/closing agent: Your title officer can often negotiate payoffs, prepare corrective documents, and work with lenders to arrange acceptable conditions for funding. See our Title Defect Resolution glossary for services that title companies provide.
Common misconceptions
- “Title insurance covers everything.” Title insurance protects against many hidden defects that existed prior to closing and that were not shown in the public record, but policies contain exceptions. It generally won’t cure a recorded lien until the lien is paid or subordinated.
- “Minor record errors are harmless.” Even a misspelled name can create a coverage exception, slow the closing, or create future claims.
- “If I buy title insurance, I don’t need an attorney.” Title insurance and a good closing agent reduce risk, but when legal actions are needed (probate, quiet title), an attorney is essential.
Quick buyer/seller checklist before scheduled closing (48–72 hours)
- Confirm title company released the final title commitment with required exceptions cleared.
- Obtain recorded payoff/release documentation for outstanding liens.
- Confirm survey and any required endorsements are in place.
- Verify identity and vesting on all deeds; correct any discrepancies now.
- Ask the title company to list any remaining items that could delay funding and request a firm plan for resolution or escrow holdback.
Authoritative sources and further reading
- Consumer Financial Protection Bureau: information on closing and title insurance (https://www.consumerfinance.gov/) — provides consumer-facing explanations of closing steps and title insurance options.
- Internal Revenue Service: guidance on federal tax liens and releases (https://www.irs.gov/).
- American Land Title Association (ALTA): best practices and explanation of title insurance (https://www.alta.org/).
- See related FinHelp glossary entries: Title Insurance, Preliminary Title Report, and Title Defect Resolution.
Professional disclaimer
This article is educational and reflects best practices I’ve used in my practice directing mortgage closings. It is not legal advice. For guidance tailored to your situation, consult a licensed real estate attorney, your title company, or your mortgage lender.
If you want, I can convert the checklist above into a printable pre-closing worksheet or draft email templates for requesting payoffs, lien releases, and corrective deeds from sellers or attorneys.
