When you pay-off a lien holder on your home make certain you record a reconveyance and save the zero demand! Let me explain.
Pop Culture loves the “butterfly effect”. You’ve heard the catch phrase, “If a butterfly flaps it’s wings…” Edward Lorenz, an American mathematician and meteorologist pioneered the chaos theory. In simplest terms, in a deterministic nonlinear system, a very small change in one location can have a very large dramatic effect in another location. I’ll tell you why this is relevant in a moment.
One Degree Off Course
The cool air held our wings seemingly motionless even as we were being pulled through the failing light toward evening by the forgiving single engine Cessna 172 Superhawk. Twilight infiltrated the San Fernando Valley like a quite ghost, colors drained from objects on the ground making the trees, buildings, homes, and roads monochromatic in grays and black. I settled back in my seat and watched Dan (pseudonym) spin dials on the control panel.
Dan punched in locations on the GPS, set the heading bug on the HSI (Horizontal Situation Indicator) and promised Air Route Traffic Control that he’d fly directly to our next expected location. Only I knew he wouldn’t. Dan was my student. I’m a CFII (Certified Flight Instructor). Oh I know Dan can fly to his next destination. I taught him well. But I also know he won’t fly a straight line. Flying a straight line takes more than a hundred or so hours of practice.
Here’s An Interesting Flying Fact
For every one degree you fly off course you’ll miss your intended destination by 92 feet per mile flown, or about one mile off course for every sixty miles flown. For example, if you took off from LA and wanted to fly to New York, but flew one degree off, you’d be 40 miles off course before you reached the East Coast!
One degree doesn’t seem like much. But over time it can make a very big change in your life. How about a Real Estate example?
I got a call from a home owner yesterday. She wants to refinance her home and take advantage of these historically low interest rates. I reassured her with sincere enthusiasm, “Great idea!” There’s just one problem. Cynthia (another pseudonym) explained she had borrowed money from a private lender more than 20 years ago. She insists she never used the money and returned it to the lender. Loan paid in full. No problem, right?
Wrong. Cynthia may have paid that loan in full but she never recorded a reconveyance some 20 years ago. A simple one page form that lets the world know she paid her loan in full and no longer owes the debt. The lender would have then issued a zero demand meaning, nothing else owed. Recording the recon, that one degree, a one page form, literally takes a minute to fill out and less than $20 to record with the County.
If A Butterfly Flaps It’s Wings
Or should I say, if only the butterfly had flapped it’s wings 20 years ago? Today, Cynthia has a problem. The person who loaned her the money and recorded a lien on her home, back in the day, is now 20 years later; dead. And there are no apparent survivors who can attest to Cynthia’s claim the money was returned. Getting that streamlined refinance just got complicated. Cynthia could buy a bond to insure against any claims that she owes money– but who wants to do that? She has a few other options, there always are, but none of them as smooth as a butterfly’s wings. If only she hadn’t strayed that one degree off – 20 years ago.
Stay On Course
In your life, in your relationships, in your marriage, in your personal affairs and finances, isn’t it easier to stay on course than deal with the ramifications later? Stay focused. Remember, one degree off course today may seem inconsequential but if the chaos theory is correct, and physics proves it is, one degree off course is going to change something big in your future.
Please feel free to leave comments. And Remember, Sharing is Caring. Thank you.
Note: Besides being a Flight Instructor, I’m a Title Company Account Executive. In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.
Chicago Title has been in business for more than 160 years. It’s a company you can trust.