Let’s catch up with our readers

Your column mentioned that the reader might want to hire financial planners, Realtors, real estate attorneys, CPAs and insurance salesmen. That’s everything but a code book.

Of course, I’m just teasing. I’m a regular reader because the advice is rock solid and it was again in this column. I started reading your column well before I bought my first home in 2015 and found it invaluable. Now I’ll be thinking about tutti frutti ice cream all night.

ILYCE AND SAM RESPOND: Thank you for being a loyal reader to our column. We know we can sound a bit like a broken record when we suggest that readers consult with various professionals about their issues. But, rarely do our readers give us enough information that allows us to provide an answer with prescriptive detail.

Another part of the issue is space. We have a limited amount of space to respond to questions.

Most questions could take several pages to answer completely. In fact, Ilyce has written books answering questions for home buyers (“100 Questions Every First-Time Home Buyer Should Ask”) and for home sellers (“100 Questions Every Home Seller Should Ask”). Each of those books is around 500 pages.

But our fabulous editor, Carrie Williams, would break down in tears if we attempted to provide that level of detail in our columns. So, we aim to provide guidance on the big issue in each question and hint at other possibilities. That’s another reason we suggest readers seek professional advice.

Finally, some of the questions we get seem simple — they might only be one sentence long — but they are actually quite complicated to answer. Take the tax code (“Please,” as the Marx Brothers might say). If you think about it, a tax question can look simple but is actually quite technical and complicated. Since we don’t want to guess wrong on the details, we provide the basics, and then some.

For every question about tax we receive, we know that many other readers have the same question with a bit of a twist. Many don’t realize the answer to that question has far-reaching implications. So, we try to provide a general answer with a gentle push to a local pro who can provide the nuance and detail that space constraints and lack of information prevent us from providing.

Glad you’re finding the column useful and entertaining.

COMMENT: Regarding your article on obtaining a release of a mortgage securing a debt that has been paid, many mortgages require the lender to release the lien of the mortgage (release the mortgage) when the debt has been paid. Frequently, a mortgage will expressly state this lender obligation.

A borrower should not have to pay to get the mortgage released, and should request that the lender email the recorded release to them as part of the documents being signed when the loan payoff is being conducted.

ILYCE AND SAM RESPOND: We agree that all lenders should issue the release of mortgage or trust deed once the underlying debt has been paid off by the borrower. When a person takes out a loan for the purchase or refinance of a home, the lender takes that home as collateral. The lender does not physically take the home, but places a lien against the home using a mortgage or deed of trust.

The mortgage or deed of trust gives the lender the right to sell off the home to pay off the debt should the borrower fail to make the payments on the loan and the loan goes into default.

Your comment is about a borrower who has made all of their mortgage payments and has paid down the balance of the loan to zero, or makes one last final payment to bring the balance owed to zero. In both of those situations, the lender should release the mortgage by sending a release of mortgage to the office that handles the recording or filing of real estate documents in the county in which the property is located. In the case of a deed of trust, the lender issues a release of the deed of trust and that form too has to get recorded or filed.

When it comes to loan payoffs, Sam sees two fees in his practice: the reimbursement to the lender of the recording or filing fee for the mortgage or trust deed release, and the fax fee to send the payoff letter to the borrower or borrower’s agent. The government office that handles the recording or filing of documents sets the cost for the recording or filing, and the lender doesn’t have anything to do with that. On the other hand, the cost for faxing the payoff letter is set by the lenders. That fee can range from nothing to $50.

These days, it would seem to us that faxing the payoff letter to the borrower or the borrower’s representative is cheaper than generating the paper payoff letter and sending it through the postal service.

Sam has yet to see a lender pay for out-of-pocket fees paid to third parties when they can get the borrower to pay those fees. In those few instances where lenders charge a fee to prepare the release of mortgage or deed of trust, we would agree with you that the lender should absorb that cost. Sam does not come across this often, as most lenders do not charge a fee to prepare those documents.

However, it seems these days that every business has unbundled the amount they charge for their goods and services. You have stores selling goods and then selling you warranty coverages for those goods. It used to be that manufacturers sold their products and included a warranty that covered you for a decent amount of time.

Now you have service providers that charge you for the service and then add on the many other fees that were once included as part of the underlying service. You can clearly see that with airlines and their pricing structure.

At this point, it seems that the only fees lenders charge at the end of a loan are the fax payoff fee and the out-of-pocket recording or filing fee. We’ll see if it stays that way.

(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through their website, bestmoneymoves.com.)