I don't sleep long enough to do much dreaming, except when I'm on vacation. Which means my experience with nightmares is limited.

Many friends tell me that their worst nightmare is appearing in front of an audience naked.

High on the list of nightmare scenarios for many home sellers, though, is having no proof they have paid off their mortgages.

It may not be the worst real estate nightmare - foreclosure, in a society that puts homeownership at the top of the list of "American dreams," is No. 1, I think, given the experience of the last eight years.

But proof of ownership is a biggie, especially for Jane Wexler, a Delaware County resident who recently contacted a real estate agent to list her property for sale.

"I paid off my mortgage in 1991," Wexler said, but "apparently no bank sent proof to me or the Delaware County Courthouse."

She discovered that her mortgage "went through six banks that all went under around 1991," Wexler said. She has a company trying to trace the mortgage, but it has found nothing in two months.

Wexler ran a credit check on herself and found that her real estate debt amounted to zero.

"Perhaps a lawyer could help, but I'm paying thousands of dollars," she said.

I asked two of my experts for their advice, wondering whether the problem is as extensive as the folks at the courthouse say it is.

"Yes, it is common," said Noelle M. Barbone, office manager of Weichert Realtors in Media.

By law, Barbone said, lenders are obliged to provide mortgage-satisfaction paperwork within 45 days after a mortgage is paid off. The lender should return mortgage documents to the mortgagor (Wexler, in this case), who should hold on to them.

"The problem has been all of the lenders morphing into other lenders, and documentation and processes slipping through the cracks," Barbone said.

Yet after 23 years of zero collection activity against Wexler, the title company should accept this risk, Barbone said. She added that Wexler should contact a title company's underwriting department to discuss this.

Wexler "should be able to get this removed and close with her buyer," Barbone said.

On the other hand, William D. Schroeder Jr., a Colmar lawyer who specializes in bankruptcy and real estate law, said he personally has not seen the situation that often.

But, he said, "this could be an ongoing problem, as the paperwork for all of these mortgages and assignments of companies having gone out of business and/or combined with other entities will now start to surface as mortgages are paid off."

Wexler, and other fortunate folks who satisfy their mortgage debt, need to be proactive and not wait for the lenders to follow the law.

"People are wholly unaware of the need to satisfy a mortgage of record once the paid note has been received from the lender," Schroeder said.

Sometimes, the title company that insured the loan, whether it was for purchase or refinancing, collected a satisfaction fee at settlement, he said. So Wexler (and others) need to look at the HUD-1 settlement sheet that involved that mortgage.

If such a fee was collected, a good argument could be made that it is the title company's headache to sort it out, he said.

The lawsuit that has to be filed is called "a quiet title action" to obtain a court order satisfying the mortgage," Schroeder said.

He could do this for her, but, as she said, she is going to have to pay a fee.

aheavens@phillynews.com

215-854-2472 @alheavens