Bank Says I Don't Own the House - Posted by Elizabeth NJ

Real Estate Investing Real Estate Financing
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Re: Bank Says I Don’t Own the House - Posted by John

Posted by John on April 14, 2006 at 09:02:40:

Ken,

That is a bad idea in my opinion. Elizabeth doesn’t have legal ownership because her deed is worthless because the Grantor didn’t have legal ownership anymore.
What would you do if you came to your vacant house to find someone living in it? And to make matters worse, the “tenant” said to you, “Oh, I have a lease from so and so and I pay $800 a month”. You would find that person and have them arrested for fraud. Then you would file the proper legal papers to have that rent paid to you. And if you didn’t want the “tenants” there you could evict them as well.
Elizabeth has no ownership rights. Her deed is worthless because the Grantor had no ownership rights.

Now Elizabeth can file a claim against her title insurance, if she procurred title insurance. She could also sue the ex-homeowner for her money back plus legal fees and costs. But, in my opinion, she would be getting into hotter water if she rented a house she doesn’t own. Hot water with the tenant and hot water with the current legal owner, the bank.

Elizabeth made a bad deal. Move on…next… it happens to the best of us.

Anyway, Ken, take care and good investing.

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Re: Bank Says I Don’t Own the House - Posted by John

Posted by John on April 14, 2006 at 08:50:50:

Good point, does she have title insurance?
Jafon, from what Elizabeth is saying the sheriff sale was completed. There is no law, that I am aware of, that says the successful bidder has to record the deed to complete the sheriff sale. Her title work should have shown a Lis Pendens. If a discharge of that Lis Pendens was not entered then she or her title company should have investigated further.
I have had similiar problems in my investment career. I purchase houses at sheriff sales and once or twice I didn’t record my deed the day I picked the deed up from the Sheriff. The homeowner tried to deed the property to someone else and that person recorded that deed. Guess what, No Way. Because the homeowner, as in Elizabeth’s case had no ownership rights. Their ownership rights were extinguished the day deed passed. Their redemption rights were also extinguished that day. In my case, I filed a motion to overturn the deed with the Chancery Judge and 1 month later his order was recorded which extinguished or set aside that other deed.
Hopefully Elizabeth will prevail but I doubt it.
I wish her the best of luck.

Take care, my friend and good investing.

John

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Re: Bank Says I Don’t Own the House - Posted by Jim V

Posted by Jim V on April 15, 2006 at 01:22:06:

John,

I think you pretty much stated the probable result.

I read through some of the posts, it appears Elizabeth has title insurance(excluding the foreclosed mortgage), but it’s unclear to me what type of deed she received, warranty or quit-claim.

She did state that the sheriff’s office prepared and delivered a deed to the lender which would indicate to me that title transferred to the lender.

I do question the concept that there’s no record of a foreclosure because if the sheriff prepared a deed, they must have had some reason to do so.

If she has a warranty deed, there’s probably a claim against the purported seller, if it’s a quit claim, she owns whatever interest they had.

Just my thoughts, imho, you called it prety much how it should play out.

Jim

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Re: Lis Pendens? - Posted by Elizabeth NJ

Posted by Elizabeth NJ on April 15, 2006 at 23:35:59:

JT,

Ben and I have communicated and I know from his postings that he has valuable insight, but I was not aware he was an attorney - thanks for the info. and for your moral support.

Elizabeth

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Thanks JT- a similar story - Posted by Ben (NJ)

Posted by Ben (NJ) on April 15, 2006 at 14:19:37:

Last year I had a similar story. I foreclosed on a property through a tax sale cert. Surprisingly, the record owner had also recently taken title through tax foreclosure. We went through the whole process, he never responded and we got title. Afterwards we found out that that lienholder’s judgment had actually been VACATED but the foreclosed out owner’s attorney had never filed the order vacating it or legally restored title to the rightful owner. He didn’t change the tax records, nothing. Pretty clear legal malpractice. I thought my foreclosure was a sure loser however when the former owner and attorney starting blaming each other instead of me, things started looking good. Neither would budge,take responsibility or cough up a dime to challenge my Final Judgment. This stalemate went on for months. After awhile I played my hand and notified them that if no legal challenge was forthcoming, I intended on selling the property asap. Nothing happened, I sold it, buyer got title insurance. Never heard another word. This is a perfect example of why NOT to fold right off the bat. You never know how easy it may be to actually prevail.

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Re: Bank Says I Don’t Own the House - Posted by john

Posted by john on April 14, 2006 at 21:16:54:

Elizabeth have your title company pull a chancery abstract. Something is not right here. Did the lender foreclose on the wrong parcel or person. check the chancery abstract.

Let us know. Listen, I am in your corner but I don’t want to blow smoke in your face and tell you everything is just fine.

check it out before you set the wheels of the banks legal team in motion.

let us know. we can learn from your experience here.

good luck.

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Re: Bank Says I Don’t Own the House - Posted by Joe Kaiser

Posted by Joe Kaiser on April 14, 2006 at 20:44:57:

It’s a silly argument. He didn’t own it, the bank did. Just because they
hadn’t recorded their did doesn’t mean anything in terms of who owns
what.

I guarantee there is history of a foreclosure and that they simply never
got their deed recorded. Not unusual and not something that gives you
the opportunity to slide into their shoes.

Gut says a loser, but do what you gotz to do.

Joe

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Re: Bank Says I Don’t Own the House - Posted by The Frisco Kid

Posted by The Frisco Kid on April 15, 2006 at 24:03:04:

Elizabeth

Just curious, who has been paying the property taxes? Any insurance coverage in force?

Also don’t you verify tenants lease when you buy? With no rent paid for 2 years it sounds like the seller knew it wasn’t his property but he got a money offer from you and said why not give you a deed which brings up the question of what kind of deed did you get?

I’ve heard of a couple of cases in my area over the years where the unrecorded document went “wild” and a later document recorded by a bonafide buyer gained superiority, so I know it is possible for you to win and it will be interesting to hear how this comes out for you.

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Re: Bank Says I Don’t Own the House - Posted by Elizabeth NJ

Posted by Elizabeth NJ on April 14, 2006 at 14:14:59:

Ken,

with all due respect, I must strongly disagree with you. There is a very clear legal chain of title in this transaction, and the bank’s position is well outside that chain, having failed to properly secure their position when they failed to even record a deed more than four years after a foreclosure that was never a matter of public record.

While it may be a problematic deal at this point, I have no intention of going away.

I have never been known to give up and walk away from a problem whether in real estate or otherwise, except of course when common sense dictates that I do so. I analyze each problem from every angle and try to make decisions based upon facts, not emotion. In this instance, I have decided to litigate to defend my position as owner of the property if the bank’s attys continue to stonewall.

Elizabeth

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Re: Bank Says I Don’t Own the House - Posted by ken in sc

Posted by ken in sc on April 14, 2006 at 10:46:12:

According to the title search, the grantor did own the property. That is whay I said run the search again to see if that is right. But if so, and since she has paid consideration for the property, I do think she has the right to rent it. I can’t see her deed as “worthless” as it was recorded first. The lender sure can’t sell the house without somehow removing Elizabeth from title.

Plus, there is not going to be anyone come to the house and say “hey, this is my house”, except maybe some person representing the bank such as a person to change the locks or whatever. That person, upon finding the house rented, would just report back to the lender, who already knows that Elizabeth claims to own the house. It won’t take long for the lenders lawyer to get in touch with Elizabeths lawyer and it will go from there.

So, you think Elizabeth should just give up whatever she paid for the deed? The bottom line is, the lender may be able to sue, but Elizabeth had the deed and I don’t see why she can’t rent the house.

Of course, as I said from the beginning I am no lawyer and I am sure Elizabeth will get good legal advice before she does anything.

Ken

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that’s what I have been saying…too - Posted by john

Posted by john on April 14, 2006 at 21:13:33:

Joe,

I agree with you but hey, I have only been doing this 10 years and I have, like you, seen it all.

Elizabeth has a fight on her hands with a bank that has legal teams ready and willing to take her to the mat, so to speak.

I find it very hard to beleive that if the Sheriff said the tendered the deed to the successful bidder (the bank in this case) then there should be a full chancery abstact in Trenton that Elizabeth can review to see the entire foreclosure proceedings.
Her title company missed it. She missed it.
She should be looking to recover her money fromt he title company (if she purchased title insurance) or go after the seller.

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Re: Bank Says I Don’t Own the House - Posted by jafon

Posted by jafon on April 15, 2006 at 19:23:37:

A very good point is raised about the taxes…

Did the bank pay the taxes before foreclosure?
If yes, did the bank continue paying taxes after the foreclosure? Or did they stop resulting in tax liens if owner was not paying?

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Re: Bank Says I Don’t Own the House - Posted by jafon

Posted by jafon on April 15, 2006 at 19:27:41:

Way to go.

If the bank had a position they would have appeared at landlord/tenant court.

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Re: Bank Says I Don’t Own the House - Posted by Elizabeth NJ

Posted by Elizabeth NJ on April 14, 2006 at 14:20:29:

Actually Ken, I’ve already changed the locks and started minor repairs to the first floor apartment. And I even called the bank’s attorneys and spoke with the secretary who has been speaking with my atty. I sent a letter to that secretary & told her that as a new owner, I had changed all the locks and if they had any questions or wanted to view the property before giving me a payoff figure, they should contact me and I’d be happy to let them in.

I am openly displaying my cooperation in this entire matter to force the bank’s hands.

Thanks again Ken.

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Elizabeth should fight - Posted by jafon

Posted by jafon on April 15, 2006 at 19:19:07:

The bank probably has no leg to stand on else they would have recorded the deed.

The property was FHA insured which means they had no reason not to follow through.

Banks are anal retentive. If they were doing something properly they would most likely completed it per standard corporate procedures.

If they did not pay the required fees they have nothing. Ask a NJ attorney how long a lis pendens is valid. If nothing else the bank would have to start from square one.

Go for the quiet title and beat the bank at its own game. The bank has got nothing. They are ripping through the vaults now to find some shred of paperwork on the property. Don’t even pay it off ask them to show that it hasn’t already been paid off.

Want to test this: Call and ask them to send a payment history statement. Let us know if they send one. I bet they won’t.

If nothing else its a short sale.

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Re: Bank Says I Don’t Own the House - Posted by jafon

Posted by jafon on April 15, 2006 at 19:30:54:

They can’t give you a figure because they don’t have sufficient records. Which means they can’t present an argument in court.

Go to a local branch office and ask them for whats due on the mortgage and I bet its not in their system.

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I can’t agree with any of your premise - Posted by JT-IN

Posted by JT-IN on April 15, 2006 at 22:07:26:

jafon:

Assuming the the the Sheriff Sale happened legally, and with all proper notice, filing of Lis pendens, etc… then nearly every statement or claim that you make is invalid.

It is my guess and belief that the title company who did the search has overlooked some factors in this situation… albeit because of the odd circumstances. The fact that they are odd, and even incompetent on the part of the Banks legal rep, doesn’t invalidate the deed or the sale… You actually display your lack of understanding of the legal process as to judicial foreclosure by the statements… not that most people do understand this process, but this is not forcing the bank on any of this, it is about the legal status of the sheriff sale that occurred 4 years ago.

What will likely be proven is…

The bank does have more than one leg to stand on…

FHA Insurance is not a factor. In order to collect the ins, the lender must foreclose and deedthe property back to HUD, in order to collect ins…

Banks (many) are really poor at the business at hand.

Quiet Title action will not work if the Bank answers with documentation, such as a foreclosure judgment and liquidation of asset sale.

Mtg, what mtg… the completed foreclosure process has removed the mtg, leaving only a note, that is unsecured.

Anyway… it will be interesting to see the resolution here. Maybe the Bank will agree to settle this with Eliz, for some reasonable number… thereby creating a win-win ending. Barring that, I sense that Eliz has little to stand against here, other than leaning on the Title Co to make her whole; (refund of purchase price and fees only, no profit potential, etc.)

Just the way that I view things…

JT-IN