Monday, June 18, 2007

Thanks but no thanks, says lender. Title stinks. HUH?

In 2004 Decision One lends $124000 to some folks under their subprime program.

Loan goes south.

Lender starts foreclosure.

Folks give lender deed in lieu of foreclosure.

Folks list property and sell it for $84000 and negotiate a short sale. Lender approves short sale netting $69000. HUH?

I get this file for title examination. There's an original unrecorded deed from lender back to folks. HUH?

File notes say lender looked at title and said no thanks, don't want to deal with it. HUH?

We find two judgments but otherwise title is ok. Might not be quite enough for short sale but it will be close. HUH?

Am I missing something?



John Povejsil said...

I looked at a file about 6 months ago that had a who's who of defunct lenders as successive mortgagees. Starting in January 2003, Lender A does a loan for $80K. 6 months later, O does a loan for $97K. In January 2004, A's affiliate, AR does a loan for $115K. In June O's affiliate N does a loan for $135K. In January 2005, F does a loan for $150K. Finally, in June 2005, B does a loan for $165K. B's holding company forecloses and vests as owner in early 2007, offers property for sale at $85K. There really weren't any title problems per se, but is was an interesting case history of a praticular property's refi cycle. This particular propery was registered, and thus had a Torrens Certificate of Title, clearly listing the mortgages and the ratcheting amounts of leverage. I can think of vague reasons why a lender may not want this reminder of the policies hanging around, but nothing specific - it's not like the file itself would be destroyed.

Diane Cipa, The Closing Specialists® said...

Guess we're gonna see all kinds of goofy stuff as these subprime refi churns get digested and regurgitated back into normalcy.