Posted by ScottE on March 12, 2000 at 12:00:31:
and funny, Bud!
Scott Evans
Can they do this? Please tell me there is a way around this!!! - Posted by Chenel Moore_MD
Posted by Chenel Moore_MD on March 09, 2000 at 23:33:29:
I have a property that was in foreclosure that was deeded to me by the seller. I applied and was approved for a mortgage(so that I could pay the foreclosure). The title report came back and I was informed that I have to satisfy past judgements on the title report that belong to the seller and his deceased mother? I already knew that I have to cure the foreclosure.
They (the seller) essentially deeded the house to me as long as I can cure the foreclosure. But the title report shows past medical judgements owed by the seller’s deceased mother and the possibility of estate taxes owed by the seller. The seller and his deceased mother purchased the house together and held title as joint tenants in common. Are these judgements on the title report the responsiblity of the buyer?
My attorney has advised me that the past judgements will come out of the proceeds of my mortgage. Is he right?
Re: Can they do this? Please tell me there is a way around this!!! - Posted by MDonovan FL
Posted by MDonovan FL on March 11, 2000 at 12:25:53:
In Florida, the judgement must be against both owners to attach to the property. It may be that way in Maryland. I would research it.
Also, find out how the estate handled the title to the property. You say they were “joint tenants in common,” but that is confusing to me. In FL there is joint tenants with right of survivorship, and tenants in common, and they are very different when one party dies. I would want the opinion of an attorney that specializers in real estate. Try to find one that is certified by the Board of Realtors, or one that owns a title company. Those are usually good signs that you are dealing with a specialist.
Here’s a way around the judgments - Posted by Bob H
Posted by Bob H on March 10, 2000 at 15:17:05:
If your state has a redemption period after foreclosure, here is one possible solution: give a 2nd Deed of Trust on the property to a 3rd party (an LLC you set up); let the f/c sale take place; redeem as a junior lienor on the created 2nd TD. The judgments will fall off the title unless the holders also elect to redeem (unlikely, and even if they do, you still end up paying no more that you would right now).
If your state is not a redemption state, your best bet is to try and buy the judgments prior to sale at a discount.
Good Luck
Re: Can they do this? Please tell me there is a way around this!!! - Posted by Rob FL
Posted by Rob FL on March 10, 2000 at 11:50:28:
Maybe you can get the judgment holders to give you partial releases for the less than the full amount owed.
Lesson learned (hopefully) always get a title search before closing.
Re: Can they do this? Please tell me there is a way around this!!! - Posted by Ross
Posted by Ross on March 10, 2000 at 08:48:08:
Your kidding right? This is Real Estate 101 type stuff.
Re: Can they do this? Please tell me there is a way around this!!! - Posted by Ben in Ohio
Posted by Ben in Ohio on March 10, 2000 at 06:45:20:
Always do a title search, with a contingency in the purchase agreement.
Check it out. - Posted by JoeKaiser
Posted by JoeKaiser on March 10, 2000 at 01:54:50:
In many states, judgments against the owner become liens on their real property . . .
However, some states have “homestead exemptions” which makes the liens virtually unenforceable against homestead property.
So . . .
The sellers may be able to pass title without the liens attaching. You may want to check that out.
Joe
Re: Can they do this? Please tell me there is a way around this!!! - Posted by TomC (Md)
Posted by TomC (Md) on March 09, 2000 at 23:43:09:
Yes, your attorney is right.
My suggestion would be to get the total amount owed on all judgements/leins. Then contact the current owner’s mortgage company and explain to them that you were trying to purchase the property, and that they would be getting a payoff (don’t say “full payment”!!) if you can swing this deal. Ask them for a short sale whereby they reduce the amount of the balance due by the amount of the judgements/leins.
Once (If) you get the mortgage company in line and they agree to a lower cost, then contact the lein holders and try to get them to take a lower payoff amount. You can end up pocketing the difference.
This might not be a deal killer, but be sure to tell the foreclosing lender that it is!! Sounds like you have more work to do to get this thing finished up.
Good thing you knew to run the title search!
TomC
Of course, since you didn’t mention the sales price, loan balance & arrears and judgement amounts, this is just posturing.
Re: Here’s a way around the judgments - Posted by Bud Branstetter
Posted by Bud Branstetter on March 11, 2000 at 21:02:38:
One of the old time approaches was to put a 2nd lien against the property to a friend or relative when purchased. You kept the release in your possession. If you ever got a judgement against you you simply foreclosed as you said and the judgement is likely to go away. Very few are likely to go back to court and get the judgement reissued against you.
Re: Can they do this? Please tell me there is a way around this!!! - Posted by Chenel_MD
Posted by Chenel_MD on March 10, 2000 at 12:17:23:
Thanks for the um…advice?