Protecting the title to your property may take court action, depending on the challenge to your ownership rights. Silent deeds, known as quiet title actions, are used to "quiet" opposition to title rights on a property. If you are not entirely sure that your title is clear of all known or unknown encumbrances or challenges, filing a quiet title action is how to proceed in many cases.
Silencing Ownership Claims
If another person claims to have an ownership interest in your property, you may need to file a quiet title action to refute his claim and clear any question regarding who owns your property. For example, if there is not an unbroken record of ownership due to the lack of deed filings or the death of previous title holders, you can file a quiet title action to remove any doubt of previous encumbrances.
Removing Clouds on Title
Without a clear title, you may not be able to sell or refinance your home, because new owners or lien holders may have their rights to the property challenged by another party. Sometimes a quiet title action is a procedural process only. For example, if you paid off the loan to your home, the mortgage company may have failed to clear your title of the lien. If the lender is no longer in business or unable to be contacted, you may file a quiet title action to remove that cloud on your title.
Filing a Quiet Title Action
A quiet title action is a lawsuit filed in court against anyone who is threatening ownership of your property but is not owed any ownership rights. Sometimes the defendant is an unknown person or entity because there is an inconsistency in the history of the title that must be cleared. If there is no party to serve in the quiet title filing, an announcement is placed in the paper, essentially notifying all local area occupants of your intentions. If no one steps forward as a defendant to your claim, your title will be cleared of any disputes that may arise against it from the past.
MERS' Role in Tracking Lenders
The Mortgage Electronic Registration Systems, or MERS, was created by mortgage lenders to track changes of lien holders and servicing agencies as loans are sold throughout the industry. MERS helps keep track of which company owns certain mortgages attached to particular properties and who services them by collecting the mortgage payments for the lenders. It eliminates the need for voluminous paperwork as loans change hands, but it does not file notes or deeds. When there is a line of numerous lenders and servicing agencies registered in MERS, it may not be possible to find the defendant to a quiet title action. Therefore, in foreclosures initiated by MERS, you may not know which company physically possesses the deed, and, if a quiet title action is filed, a defendant may not be present to lay a claim to your property.