We purchased our home 10 months ago. We are currently refinancing and due to close on our loan this Monday. Our lender informed us that the title showed a lien from the seller's mortgage bank and that our sellers mortgage payoff was never filed 10 months ago. We went back to the title co. we used 10 months ago, they removed the lien because they have the payoff check, yet the seller's mortgage lender still has not filed. Should we still close while waiting for the bank to file? Who's fault is this? Any recourse?

I used to work for a law firm that specialized in real estate. Unfortunately, the problem you describe is fairly common. Your attorney will need to send a letter to the old mortgage company instructing them to file.