Wednesday, April 18, 2012

open your mail! ;)

This is a shot in the dark, however, any information would be helpful.  I have a fairly confusing situation.  I refinanced my home in 2007.   When we originally bought our home in 2000 it was listed as 2 parcels.  2 years later we went through the proper process of obtaining a building permit to put a manufactured home on the 'empty' parcel for my father-this was signed off through the county.  Little did we know that their had been a financial segregation (FS) put into place by previous owners, this was supposed to have been 'lifted' at the time of sale but was not, in addition the county should not have allowed a building to be placed on the FS parcel.  My original lender routinely paid the taxes for both parcels per my request  without any questions asked.  When I refinanced in 2007 I asked for the same convenience of having my taxes and insurance paid with my P&I payment.  It was recently brought to my attention that my new lender had not been paying on the taxes for the 'other' parcel.  It appears that there was a mix-up in the legal description; the lenders legal description does not encumber both parcels, however, the county legal description does encumber both parcels.  In order to avoid foreclosure on the property the lender paid the back taxes and gave me 1 year to pay them back, raising my mortgage payment another $1400.  This has proven to be a financial hardship.  In discussion with my mortgage company somebody had suggested that I file a claim with the title company.  I did contact the title company and they are saying that they have documentation by the lender requesting that the 'other' parcel be removed from the deed of trust.  I am confused as to who is responsible for this mess.  The lender, the title company or both?  I apologize for the lengthy question.  There are many factors that further complicate this situation such as the county not having lifted the original financial segregation and the fact that I chose not to open my tax statements assuming that they were getting paid along with my parcel/home taxes until it was too late.



Morning, T:

I'm not sure about the FS because we don't have that in PA, however, on the issue of the taxes and encumbering the second lot, I can comment.

Lenders do not pay taxes on land that they have not mortgaged and so the current lender cannot be faulted for not not paying them for you.

There may have been some reason why the lender did not want the second lot in their mortgage.  We don't know, but the real problem in all of this is just basic communication and taking the time to read documents you sign.

Presuming there were no written [pre-closing] disclosures that described the land or the tax figures, there were at least two documents presented at closing that, if read, would have alerted you.  The mortgage document contained a description of the land.  The initial escrow statement gave you tax figures.

In a refinance transaction, the title company is insuring the lender and they are taking their instructions from the lender.  There is a presumption that you and the lender are on the same page.  A good title agent will keep their eyes and ears open for possible misunderstandings and help the lender and consumer resolve potential errors, however, this is a courtesy and good service and not part of the insurance.  I don't see a title insurance claim here.

If you've not read the book or seen the movie, I recommend looking for The House of Sand and Fog.  It's about a title insurance claim and based on a true story in which the homeowner neglected to read her mail.

Humans can have misunderstandings and consumers have an obligation to read over documents or risk being legally bound in an unexpected circumstance. This seems to be a hard lesson learned.  I wish you well.


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