I’ve heard an occasional story about people who’ve paid their mortgage in full having to fight off foreclosure.

Another nightmare scenario involves multiple lenders attempting to foreclose on the same property.

Although these cases are not typical, they are an indication of the title paperwork mess that now pervades the mortgage industry, thanks largely to the shoddy practices developed in order to support profitable speculation in derivatives.

Aldo Svaldi writes in the Denver Post about Brent and Wendy Diers, who paid off their mortgage in April, but Citibank never sent them their title and is now proceeding with foreclosure, despite a judge’s ruling that they are not in default!

Brent and Wendy Diers of Fruita thought their foreclosure nightmare would end in April when they sent a check to pay off their mortgage.

But more than six months later, CitiMortgage hasn’t followed through on repeated assurances it would release the lien and give them title.

And despite a judge’s ruling that they are not in default, the lender’s law firm, Castle Meinhold & Stawiarski, continues to pursue a foreclosure sale.

“We are not in default and they do not have authorization to sell our house,” a frustrated Wendy Diers said.

Although the Diers case is extreme, it is just one of several stories of borrowers in Colorado and elsewhere who find themselves trapped in a frustrating state of limbo.

Read the full article here.

Hm … maybe those of us who have been making our mortgage payments on time for years and even look forward to paying it off someday should research the state of our title.

Can we be sure our title still protects our right to the property?

If you’re not sure who owns your mortgage, start here.