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OT-John T Lawyer--Looking Into The Foreclosure Abyss

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noncompos

Well-known Member
John: In case you're not already following Ibanez In the Mass Sup Crt, there's an even worse one in their hands now...
Mass apparently has a Land Court; the same judge who decreed the bank trying to foreclose Ibanez couldn't foreclose because they had no standing (failure of purported assignment chain) has now decided a purchaser from a bank that foreclosed has no title because the bank had no title because the bank's foreclosure was invalid because of no standing, as in Ibanez...if the Mass Supremes agree on this one it'll almost certainly trigger some kind of Federal intervention...(orig post on nakedcapitalism.com)
We're living in interesting times...(an old Chinese curse was "May you live in interesting times")...
 
Thought that was interesting, a lot of homeowners were stopping foreclosure because the bank couldn't prove they had a good deed. This comes around to bite the homeowner in the butt, because if they got a deed through the bank how do they know they have a good deed.
 
Doesn't the function of the Title Ins. Co. and title search come into this some where? Title search its self is not a big deal,I've did it several times on property that we aquired,not saying that I don't trust the Title Co. entirely!And isn't John T in Florida with limited PC use available,or so he said a while ago?
 
That's why you buy title insurance. And the fact that a foreclosure is invalidated doesn't guarantee that the current owner will lose the property to the original owner. The former owner, no longer in possession of the property, now has to prove they have a valid ownership claim. Just because their foreclosure was invalidated doesn't automatically give them ownership of the property, let alone possession.

Don't blame the courts for this mess. The mortgage industry deliberately short-cut the mortgage and foreclosure processes in order to maximize their profits and minimize their losses. Now they have to pay the piper. Again.
 
I asked a lawyer about some peculiarities on my property and the title insurance. Was told it was a suit process instead of filing a claim. Wondered how good of lawyer he was because under that scenario why buy insurance if you have to hire a lawyer anyway, just hire a lawyer and sue for bad title.
But you would seem to be right that home owners would be covered, but like any insurance you're suppose just pay them and not get anything back.
We moved to an area were home inspection, title insurance and even having a spectic tank wasn't common.
 
Many foreclosed homes get sold with "quit-claim" deeds. This type of deed does not guarantee a seller has any right to sell anything.

I can legally sell the state of Alaska to you, with my "quit-claim" deed. All it is - is a sale of whatever rights I might have to the buyer. It does NOT claim I actually have any ownership (note this might vary by state laws).
It is my "quitting" any "claim" I might have to the subject property.

I've bought two foreclosed homes from the much-heard-about evil Countrywide Bank. Both came with quit-claim deeds. But before buying, I did abstracts and title searches on my own - and then paid extra bucks for title insurance - and got warranty deeds. If the title company had refused to insure my title, I would not have bought.

Regardless of what happens with some of these foreclosed homes, it still boils down to people who promised to pay, and then . . . did not. That is NOT the banks faults.
 
To cut through a few layers of the "onion", it comes down to CEO's and others that promised to do what is best long term for the USA, but they did not.
That sent much of what we had worked for across the waters so that they could not just turn a good profit, but make enormously astounding profits at the sake of giving our sheer foundation of jobs and financial health away.
I don't believe there were record numbers of foreclosures prior the collapse in 2008. Many of the folks that had "promised to pay" were indeed doing so.
It is the typical "all of the pleasure, but none of the guilt" going on today as to who accepts responsibilty for our busted economy today.
Free enterprise only really works when we have honest CEO's and lawmakers with good intentions.
 
Title insurance is like liability insurance. The insurance company promises to defend you against claims made by others against you. You, as the insured party, can't make a claim against your policy for the same reason you can't sue yourself. You can't be both plaintiff and defendant.

In other words, title insurance only comes into play when someone claims to own all or part of your property.
 
JD Pretty much same here word for word. Banks sell there interest and new buyer pays all the other liens.
 
You buy insurance to put the insurance company at the head of the line to hire and pay lawyers when something goes wrong. If that doesn't work, then you have to hire a lawyer but most of the time the insurance company wins for you.
 
Don"t put too much faith in title insurance. I bought a property in Texas that turned out to have a bad title. We filed lawsuits over it and much to our surprise, found that the title insurance company knew about the problem and was trying to keep it under the carpet until the statute of limitations expired. They ended up paying that greatest part of the damages we collected.

As with a lot of other insurance, they take your money but when you need it, they look for all kinds of excuses NOT to pay.
 
I'm with you on a couple of points, but not all.

"CEO's and others that promised to do what is best long term for the USA"

I doubt they ever promised that. Companies compete with each other for customers; if one company goes offshore and gets the customers with lower price/quality merchandise the other companies have no choice but to follow suit. Politicians should see to it that the other countries are playing fair but that doesn't seem to be happening today.

"I don't believe there were record numbers of foreclosures prior the collapse in 2008."

True up to a point. As long as the bubble was inflating people were buying houses they couldn't afford and flipping them to pay off the mortgage. As soon as real estate prices started to drop they were trapped; the only choices are foreclosure, or for the bank (or someone else) to give them a gift (liberals prefer the term "forgiving" the debt). It seems to me that those of us who borrowed what we can repay and have been making our payments are more deserving of a gift.
 
Yes, and title-insurance is not unlike other insurance policies. It's coverage is limited and you have to read the small print. A "warranty title" is not warranteed for all claims that might pop up in the future. Just got done buying a warranty title from a title-company in Rogers City, Michigan. Small print reads - "warranty only covers claims that existed in the public record." So, if somebody pops up later with a claim that was in their bed-room drawer, and not filed with the County Clerk? It may be 100% valid and the title company will not cover it.
 
Don't depend on title insurance to pull your chestnuts out of the fire- most policies have an exclusion for any irregularities or mistakes in the foreclosure process. To do you any good, you have to get the preliminary commitment before the foreclosure sale- and even if they did not have the exclusion, title company would automatically be exempt from any liability that occurred after the date and time of the commitment (ie, the actual sale itself).

Not likely the buyer at foreclosure sale would lose the place- he is a "bona fide purchaser" (BFP)- a purchaser for value without notice of defect. The property would no longer be an issue- it would be a money damages issue between the lender and it's former customer, and court would have to sort out who was in the wrong, or allocate between the two.

The issue is spreading- local judge just enjoined a foreclosure sale, pending resolution of the MERS issue. Too lengthy to go into here- google MERS for some interesting reading, if you're so inclined.
 
Here, they are sold on a "Trustee's Deed"- trustee is liable for mistakes he makes in carrying out the foreclosure. We're pretty much all non-judicial here- bank gets the house (or the money, if a third party buys it), but no deficiency judgment.
 
Unrecorded claims seldom win out over third party buyers who do not have notice of the claim (the BFP doctine I mentioned above). But they can be good as between the two parties to the claim.
 
JD: You might want to look into if ALTA Owners policies are available in your areas...
Out here title cos issue (or did when I was working) standard mortgagees policies (insuring the lender) and ALTA mtgees policies, the ALTA being extended coverage, generally against unrecorded mechanics lies after recent construction, but including other extended (more comprehensive) coverages, I THINK including unrecorded easements visible on the ground...
Although title companies hated them, and didn"t generally mention they were available, per the increased risks, ALTA Owners policies (insuring you) might be available...costs are higher, physical inspection of the land was required, I believe surveys of at least the buildings and improvements locations, etc, but a few owners felt it was worth the extra costs
 
But the banks fault is grouping known bad deeds and selling them all oveer the world destroying other's and our economies, lying to people about interest rates, what they could afford, and what ever other lie to get them to sign.
 
What specific bank has been convicted of defrauding clients by "lying" about interest rates?

I'm not saying it's never happened - but I don't know of any such cases. Seems you do. Please give some names.
 
Why would it not be good and where is "here."

I can't say I keep up with all the laws in all the states - but can't say I ever heard of one that has a legal requirement for filing deeds, easements, etc. There certainly aren't any in New York, Texas, New Jersey, Vermont, Florida or Michigan.

Filing a deed protects the owner from document loss, and gives the government a heads-up where to send the tax bill.

Filing a deed also gives you some insurance that the deed is written properly - since County Clerks won't file them unless they are done correctly (correct language, notarized/witnessed signatures, etc.)

As far as I know - there is no legal requirement anywhere in the USA to file a deed - and it is still just as legally binding - if done correctly.

A legal deed must . . .

be in writing with proper legal description
grantors and grantees must be named
grantors and grantees must be competent
must be signed by grantor and grantee
must be accepted by the grantee

And going beyond non-filed papers, parties can have implied claims to property with nothing written anywhere - e.g. "easements by use", "adverse possession", etc.

I own two properties I bought 20 years ago and never filed the deeds and never paid a penny of taxes on them. All 100% legal and I can file my deeds whenever I want. The county doesn't care who pays the taxes as long as somebody does.
 
Under Pennsylviana law a deed must be filed in the county where the property is located. If you do not file a deed, the legal owner will be the person/persons listed on the deed on file.
 
in la fayette co wi they have interesting case it seems bank wanted to reposse some property the bank learned the property didn"t belong to the person with mortgage but someone else.
how could a bank do this no title search maybe?
 
JD: Out here there was no requirement for the grantee to sign the deed; there were a few, but the only ones I recall were correction deeds (scriveners errors in names, desc, etc) to evidence both the grantors and grantees accepted the correction.
Not recording a deed creates a certain amount of risk for the owner, and is generally not a good idea, unless there are other overriding circumstances that make that risk the lesser of other particular risks..
 
I don't know if a bank is going to take the fall as much as individuals. Plenty of people in the news, lawyered up, saying how their income and interest rates were manipulated and lied about.
 
I thought they were insuring you a good deed and any peculiarity means you have a suspect deed for them to make right. Just what I thought it was.
 
I'll believe it when I see the actual Pennslyvania statute.

What number is it?

This is from the Penn-state Website . .

"Recording a Deed is not required in Pennsylvania, but it is necessary to record if you wish to avail yourself of the protection of Pennsylvania's recording laws. You should consult an attorney for a better explanation of the consequences of not recording a Deed. "
 
Yes, that I know. If the only deed is in your house, and your house burns down - you've got no proof of ownership. Filing a deed with the County Clerk gives an owner the added protection of "official document storage."

In my area, it's not uncommon for farmers to sell land and ask that it NOT be recorded for X amount of years. That because they can be penalized for such sales if they've been getting certain tax exemptions. This can be done with an outright cash sale, or a land-contract.

I've got two properties like that (cash sales), both I bought over 20 years ago. In both cases the farmers are retired and now living in Florida. The farms were sold and somebody eles is paying the taxes on my land (in theory). The new land-owners know it. The problem is - it's going to cost some money and work to record now. Tax maps have to be redrawn, and the county wants surveys before changing deeds. so, at this point - by mutual aggrement, it's never been done. The county doesn't care who claims to own what - as long as somebody is paying the taxes.
 
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