Closing in Five Days: Old Mortgage, Judgment Lien, Encroachment, and Wire Fraud
Your firm represents the buyer in a residential purchase. Closing is scheduled for Friday, five days away. The title commitment lists an unreleased 2003 mortgage from a prior owner and a 2018 judgment against the seller's ex-husband, who conveyed his interest to the seller by quitclaim deed in 2016. The survey shows the neighbor's fence encroaches two feet onto the lot, and the buyer's lender requires clear title. The seller is traveling and executed a general power of attorney two years ago; the title company wants a specific, recorded POA. Yesterday the closing agent emailed revised wire instructions with a new bank account, saying the original account was 'under audit.' The buyer's agent calls you asking whether the buyer should wire funds now to avoid delay.
1. How should you handle the title objections and the POA, and what can you do yourself?
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I would prepare a title objection and curative plan for the attorney's review, not issue a title opinion myself. For the 2003 mortgage, request a payoff or release from the servicer and, if unavailable, a lost-instrument affidavit and indemnity acceptable to the title company. For the 2018 judgment, the key issue is whether it attached before the 2016 quitclaim conveyance; if the judgment is against the ex-husband personally and he had already conveyed, it may not encumber the property, but the title company and attorney must confirm. The two-foot fence encroachment needs a survey affidavit, a boundary-line agreement, an easement, or a title exception the lender will accept. For the POA, the general POA is likely insufficient for a real estate closing; the seller should execute a specific, notarized, recordable POA, and the title company may require recording before closing. I can draft the letter, order the payoff, coordinate the survey, and track the closing checklist. I cannot tell the buyer the title is clear or waive an objection.
2. What should you do about the revised wire instructions?
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Do not wire. Revised wire instructions received by email are a classic business-email-compromise pattern, and the 'under audit' explanation is a red flag. I would call the closing agent at a phone number independently verified from the title company's website or a prior known document-not the number in the email-and ask for verbal confirmation. I would also notify the attorney and the buyer immediately, preserve the email and headers, and ask the title company to confirm instructions in a signed writing. The buyer should not send funds until the attorney and title company verify. If funds were already sent, call the bank immediately and request a recall. I should not reassure the buyer that the email is legitimate just because it uses the right logo. Wiring fraud is hard to reverse quickly, and the paralegal's role is to stop the transaction and escalate, not to make the security decision.
3. The buyer asks whether the two-foot encroachment will be a problem at resale. Can you answer?
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I can give factual information-what the survey shows, what the title commitment says, and what the lender requires-but I cannot advise whether the encroachment will be a problem at resale. That is a legal opinion about title marketability and future buyer or lender acceptance. I would tell the buyer that the attorney will review the survey and title exception and explain the options, and I would document the question. If the buyer is anxious, I can schedule a call with the attorney rather than fill the gap myself. Giving a reassuring answer could be unauthorized practice and could mislead the buyer about a material defect.