Does that sound too harsh? Maybe it's got to sound harsh because we've got this crazy deal that looks like a scam on the one hand and on the other, absolute incompetency. I can't figure out if they are all just plain dumb or if somebody is really trying to get one over on the other. It's bizarre. Here's the story:
A young lady contracts to purchase a house. She is probably a subprime candidate and might have gotten approval a few months ago, but now she can't. Her mortgage loan was rejected and the Realtor can't find a lender to take her.
Enter Mr. Wacko, the licensed mortgage broker (Yes, we checked.) who offers special private financing. Mr. Wacko finds investors who purchase the real estate then sell it to the "buyer" in a rent to own program. So, it's really not financing but that's what he calls it.
I forgot to mention that the property in question is REO. The giant lender who owns this property insists that the contract with our young lady be released and a new contract be drawn with the new buyers. The Realtor complies.
The buyers in the new contract read as follows: [Don't worry, these aren't their real names.]
ACME Partners, Bugs Bunny, partner
Harold and Maude Treestand
Barney and Molly Frog
There is a letter attached to the sales agreement which was included in the submission to the REO attorney. The letter indicates that the parties wish to take title as tenants in common and that they wish to have an equal three way split of ownership.
The big REO attorneys don't believe in faxing proposed deeds. They deliver the original signed deed via courier on the day of closing. Our buyers wanted a mid-morning closing and they wanted us to travel to them which was one whole county beyond the property location and the offices of both Realtors. We agreed but noted that we wouldn't have the deed in hand. We'd fax a copy for their review to the table. That was the plan.
We received the deed and I noted the grantee section read as follows:
ACME Partners, Bugs Bunny, Harold and Maude Treestand (husband and wife), Barney and Molly Frog (husband and wife) as tenants in common
This bothered me. The buyers were not represented by legal counsel. They were relying heavily on Mr. Wacko, the licensed mortgage broker, who brought them into the deal. BTW - It's a cash deal.
I am not an attorney. I am a licensed title agent. When I read that grantee section, I see FOUR entities in title - one partnership, one individual, and two married couples. I am fairly confident that it is the intention of the parties that Bugs Bunny is not taking title as an individual but in some relationship to the partnership. I can't give legal advice. My title policy will match the deed and therefore these folks have to decide how they want to take title. I can't advise them, but when I see a situation in which I think they are off course, I try to make it PRETTY obvious that there is an issue they should look very carefully at and perhaps seek legal advice.
So, we made an extra first page of the deed and typed "Manner of ownership is acceptable" next to the grantee section and asked the closer to have them initial it. We asked the closer to make certain they took time to read it and decide if it was correct.
They didn't like it. They wanted us to add language delineating the three way ownership. I said I'd be happy to but before deciding on that language I wanted them to look again at the partnership and I asked if they had an attorney. Mr. Bunny said yes and he said that he was happy with the way his name and the partnership were typed on the deed and so I said fine.
I still felt uncomfortable because it's a crappy grantee section and I do not under any circumstances want to leave this work in a file without some evidence that I had not created the deed in this manner. I wanted a paper trail so that it was clear that these folks had approved and chosen their language themselves.
So, I asked them to simply write down the words they would like us to add to the deed to delineate their ownership shares. At this point Mr. Bunny put Mr. Wacko on the phone and Mr. Wacko insisted that we use the language of his letter. I said that though I could type the contents of the letter in that section, we really only need them to describe in a few words the ownership split. Mr. Wacko got all bent out of shape and refused. He insisted that we draft language and he would review and approve it and I refused.
We didn't close.
This case got even more complex when I spoke with the Realtor who informed me that this partnership was set up between Mr. Bunny and his child and spouse, Harold and Maude Treestand, so that when Mr. Bunny dies there won't be any inheritance tax. I told the Realtor these folks really need legal advice. I get the distinct impression that Mr. Wacko is out there putting these deals together and I don't think he has a clue how far out of his league he really is.
This will sound cruel, but I really think Mr. Wacko is ignorant and perhaps just plain dumb and he thinks he's really smart and he is leading all of these people into transactions involving large sums of money and giving all kinds of advise outside of the license of a mortgage broker. Frankly, I think he's practising law without a license. That's not my business and I don't see any fraud. I see stupidity but no fraud so as long as I document that we aren't causing the stupidity, I'm fine.
The REO attorney has asked them to suggest language and they have thus far refused to provide it and so we wait. In the meantime, these folks are under contract with no contingencies and a $100 per day penalty if they don't meet the closing deadline which is coming up fast.
YOI. Double YOI.
PS I love bunnies. I have nothing against treestands though I prefer treehouses. I love frogs, especially those little green tree frogs. I love licensed mortgage brokers - it's the lulus like Mr. Wacko that drive me nuts.
PPS Yes, I agree that the title of this post is only loosely related to the story because I made up a bunch of names but it's late and I'm only half of a creative brain tonight and we have to settle for almost interesting. Sorry!!!