Need-to-knows when mortgage is paid off

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Dear Benny: Because savings interest rates are so low, I’ve decided to accelerate paying off my home mortgage.

But after I pay off the mortgage, then what? What else do I need to do or make sure is done by the bank/mortgage company?

For instance, changing the home insurance beneficiary from the bank to me, but are there any other things I need to do? – Nelson

Dear Nelson: That’s an excellent question. My standard and perhaps somewhat glib response is: “Don’t burn the mortgage.”

When you first obtained your mortgage loan, you signed two documents: a promissory note and a mortgage document, usually called a deed of trust.

The trust was recorded among the land records in the county where your property is located. You must make sure that the deed of trust is formally released from land records. This is accomplished by filing a release – often called a “certificate of satisfaction” – on those same land records.

Lenders treat this in different ways. Some actually will arrange to have the release recorded and will charge you a nominal fee for this service. Other lenders, however, will just send you the promissory note, marked “paid and canceled” and you have to record the release.

If your lender is a private individual, make sure that you get the note back simultaneously when you make the final payment. You should also (1) advise your insurance carrier in writing that you no longer have a mortgage; (2) advise the real estate taxing authorities in your jurisdiction to start sending you the original tax bills, assuming that you have been escrowing for taxes and insurance; and (3) don’t forget to stop any automatic payments that you have with your bank.

Then, and only then, enjoy your free-and-clear house.

Dear Benny: Our condominium board of directors recently sent out proposed new parking rules to the community.

Presently, the parking lot is a common element. At the hearing, approximately 60 people showed up for the meeting along with other people who e-mailed the BOD. Ninety-five percent of the unit owners who responded to the proposal told the BOD they did not like the proposed parking rules and that the BOD should enforce the existing policy.

As a result, the BOD wanted to do a survey of the community to see if the community believed there was a parking problem. The BOD received approximately 102 surveys – out of 404 – of which 20 people voted that there was a parking problem. The other people said no.

The BOD passed the parking the policy. One BOD member stated, “It does not matter what the majority of homeowners want.”

The policy requires owners to register their cars in our state with our condominium address. It also limits the number of parking passes per unit to two.

There are always available parking spaces on the property, just not in front of an owner’s condo. The community does not want a tow truck policing the community. We do not have a 24-hour desk for someone to obtain a parking pass in case they need a pass.

What should we do? – Julie

Dear Julie: Is this a runaway board or do they have the authority to enact the rule despite overwhelming opposition? Too many times I have heard board members say, “We are the board, and we can do what we want.”

I suggest that you organize a “protest group,” have people contribute to a legal defense fund and retain a lawyer familiar with community association law. The lawyer should provide a legal opinion as to whether the board has the authority to enact such a rule.

If the board is unauthorized to enact the rule, then your group should consider filing a lawsuit to enjoin the enforcement of that rule. If there is an administrative body that handles community association complaints – such as the Commission on Common Ownership Communities in Montgomery County, Md. – then take your complaint there.

Obviously, before taking any legal or administrative actions, present your case to the board and ask them to respond within a short period of time (two to three weeks). I always believe in giving the other side an opportunity to react before any action is taken.

If, on the other hand, your attorney opines that the board has the legal authority to pass that parking rule, then you really have only three alternatives: (1) mount a campaign to throw the rascals out of office (your bylaws will spell out how this works); (2) accept the fact that you live in a democracy, and that your elected board has the right to make decisions that you may not like; or (3) move out.