Thursday, June 26, 2014

foreclosure error discovered before closing brings transaction to a halt


I have begun to do some research in regards to a delay in my house closing because of an error from the sellers title company. Here is the scenario:

I am purchasing a home that is bank owned and was listed under a real estate company.  I went thru my agent who I have been dealing with for the past 7 years.  We looked at the house 1 day after it was listed, liked it and made an offer which was held for 7 days  to see if there where other offers.  We got the house.  we began the purchasing process.  Had all documents necessary to close on the date of 6-20 including financing in 17 days.  The day before the close the title company states they do not have record of the mortgage holder being served to sign the deed over.  What there is record of is the sheriffs office served papers to a tenant that was living there and not the mortgage holder. 

The issue now is finding the owner.  My agent is telling me they may need to do a quiet title and that could take additional month or two.  I want to know if I seek compensation from the title company for there mistakes.  In the contract from the selling agency. It states that if I am unable to close on the date noted that for each additional day after that they would collect $50 per day. 

I have several appliance that are to be delivered and they will not hold any longer after this week. I am looking to get into the house as we have just added a new baby to our home.
Let me know your thoughts.

Hi, S:  This is unfortunately not so uncommon.  Title examinations performed on behalf of a buyer and.or their lender for properties sold after foreclosure often find foreclosure errors.  This is why it is so important to use your own title agent, not the one being used by the REO seller.

The problem in this scenario is the expectation of timing.  Think of the title examination as you would a home inspection.  You want the results before you make definite plans because any big problem discovered in the process might cause a delay or even a desire to get out of the contract.

Most buyers and real estate agents have not experienced the finding of serious title problems and so they ignore the risks of moving forward with plans before the result of the title examination is revealed.

On the seller side, expect them to agree to an extension but don't expect them to cover any damages you may have due to the delay.  Your choice at this stage is to wait it out or get out of the contract and look for a different house.

Sorry for the bad news but the title examiner did what they were hired to do and that is to vet the title.


Saturday, June 21, 2014

If you want your name on the deed, you need to verify at closing that it's on the deed. Don't trust anyone else to check that for you.


In 2007, my husband and I purchased a home.  Due to student loans, the mortgage was obtained only by my husband.  At closing both of us were present as I was to sign the deed.  My husband passed away three years ago and without a will.  His death was ruled a suicide and no insurance money was paid.  I am still in the home and would like to keep it.  Since my name was not on the mortgage, the bank will not communicate with me.

I went to the records department at the courthouse and have discovered that the title company wrongly put my name on the deed of trust and only put my husbands name on the deed.  Is the title company liable?  How do I correct this?

Thank you,

Hi, L:  I am not an attorney and cannot give you legal advice.  You may wish to consult with an attorney to be sure you are protecting your interests.

The suggestion I have is to read the deed of trust carefully and look for the language that says "heirs and assigns" because this is how you will tie your authority to the document and thus to your lender.  If you did not raise an estate for your husband, talk with the Register of Wills at the courthouse and explain that he died without a will and ask them how you can open an estate to deal with his assets.

My father died without a will and what I had to do was to take a death certificate to the Register of Wills and take an oath to administer the estate.  Once an oath was taken, I received what is called a short certificate.  The short certificate tells whomever needs to know that I am the official representative of the deceased. You should have a similar procedure in your state which I do hope helps.

As for title insurance, the policy is unlikely to offer you assistance for this situation because your husband was the insured, not you, if you weren't on the deed.  You can always file a claim to see what they say. The way something like this is viewed is that you have an obligation to read the documents you sign to protect your interest.  If you wanted to be on the deed, you should have checked that at closing.  If you did not have an attorney representing you at that time, then you were acting in your own interest without representation.

If you have evidence that you gave written instructions to the title agent that you were to be included on the deed or even if your name was on the sales agreement and you did not agree to remove your name as buyer, then you should consult an attorney and discuss suing the title agent for negligence.  This might also be a basis for a title insurance claim. An attorney can help you to weigh options.

Good luck and I am sorry for your loss.  Hope you can get the lender to work with you.  If all else fails, you can contact the CFPB [Consumer Finance Protection Bureau] to see if they can intervene with the lender to work things out for you.