An unreleased deed of trust is a cloud on title and technically renders the property unmarketable. This is a common title defect usually arising from the current owner’s purchase of the property where the prior owner’s mortgage was paid-off but the deed of trust was not released from the land records.

If the last servicer of that loan is in business, usually a release can be secured within 2 weeks. Older loans are more difficult and take more time. A copy of the seller’s title insurance policy will enable the title insurance company to “insure over” this lien and allow the closing to take place, if the buyers agree, even if the lien release has not been secured by the closing date.