Make sure county recorder receives your good news

Q. We just made our last mortgage payment. I heard there should be one more thing to do, which is to obtain a recording with the local county office. What do we need from the lender to do this recording? What is this recording about?

A. Anyone who looks at your county's public records can see that there's a loan out against your house. You want a new document filed there, so that anyone - a prospective buyer, for instance - could see the debt has been paid off.

Many states require your lender to send the document directly to the records office. After that, it's forwarded to you. But the lender may send it straight to you.

It may be called a satisfaction certificate, discharge of mortgage or reconveyance deed. If you receive it without anything to indicate it's been entered in the public records, take it to the county office and put it on record yourselves. This could save a lot of fuss in the future.

Banks are pretty much overwhelmed lately, so give them a few months before you start worrying. Then if you haven't heard anything, check the record office to see if the document is on file. If it isn't and you don't have it, start calling and writing your lender. Keep after them. It's important.

Q. Can the owner of a residential mortgage in good standing (no missed payments, no changes in employment) require full payment whenever they choose?

A. I haven't read the mortgage documents, so I don't know under what conditions the holder of the mortgage might have the right to declare the remaining debt immediately due and payable - "call in the loan." Usually it's if monthly payments aren't made.

A mortgage document might list other happenings that would give the lender the right to call in the loan immediately: if the borrower destroyed a building on the premises without permission, for example.

If you're just curious, the answer lies in the mortgage document; read it. If you're asking about a specific situation, consult a real estate lawyer.

Q. What happens when you buy a house from a person as a "for sale by owner," and that person, who is still paying a mortgage on the property to a bank, goes bankrupt?

A. There's nothing risky about buying a house without a real estate agent, but it sounds as if you didn't have an attorney, title search or title insurance, which is indeed risky. I can't imagine a lawyer would have let you purchase the property with that mortgage still out as a debt against it.

Bankruptcy doesn't cancel a mortgage, if that's what you're hoping. The loan will remain as a claim against your house. If payments aren't made, or if the lender finds out there's been a change in ownership, they can declare the whole debt immediately due. If you couldn't pay, they could foreclose and put the place up for public auction.

Q. If my real estate agent is selling my house as well as being a buyer's agent for finding my new home, should there be any reduction in his or her commission rate?

A. There's no "should" about it. Commissions are a matter of agreement between you and your agent.

I expect you'd have a good argument if you're authorizing your agent to put in reduced time and effort on the selling or buying end, to reduce the amount usually spent on advertising, and to reduce the share of commission offered to cooperating firms that might bring buyers to your home.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (please include a stamped return envelope), or readers may e-mail ehlank@aol.com.

2009, Creators Syndicate Inc.