Contract signed on a HUD home, now we have a title problem! (foreclosure, refinance)

[cris006]

After an appraisal and being listed by a broker specializing in REO, I don't understand how this could have slipped through.

Here's the message:

"This is a courtesy notice to let you know we are currently working on the following title issues that have been recently brought to our attention:

Potential bankruptcy against foreclosed party

Please keep in mind these issues, if unresolved may delay closing. Purchaser has the right to cancel or may wish to wait for resolution. If purchaser chooses to wait for resolution, HUD will only allow up to 2 extensions (30 days) and I cannot guarantee if or when these issues will be resolved. HUD will not be responsible for or reimburse purchaser any additional expenses incurred."

Do I have any recourse against the broker if I lose the house?

[txgolfer130]

nope. But it's good that you found it now, vs. being informed after you've moved in and are then evicted.

[Squirl]

No you don't have recourse against the broker. They accepted the listing in good faithl and the purpose of a title search is to discover "muddy" titles. If you are extra nervous, go ahead and phone the title company and ask what the progress is in a few days. If the house was vacant when you viewed it, I believe it will probably be resolved.

[HockeyDadof2]

Appraisers don't check the "cleanliness" of title, we only verify the current listed owner. That's the purpose of the title search.

[nsumner]

What HUD says and what they do are 2 different things a lot of times. There are always exceptions.

They will reimburse you your earnest money but depending on what other expenses you have into it, inspection and appraisal (if you're doing an FHA loan, you shouldn't have paid for the appraisal). They are indeed in breach of contract and your Realtor should fight to get all the monies your are out.

You may want to seek legal advice from an actual lawyer or legal forums.

Naima

[cris006]

I've cancelled the inspection until this is resolved and expect no further expenses. Does anyone have any insight or opinion as to the likelihood of this being resolved in less than 2 months' time? That is my window before HUD delists the property.

[BigDGeek]

Originally Posted by cris006

I've cancelled the inspection until this is resolved and expect no further expenses. Does anyone have any insight or opinion as to the likelihood of this being resolved in less than 2 months' time? That is my window before HUD delists the property.

I found out before I even attempted to refinance my house that my house does not have clean title; a subcontractor sent me a 'courtesy' letter informing me of a lien he filed on my house over three and a half years ago. I just found out about it in January. I can't sell or refinance until it's cleared. (The lien is completely invalid and he would never ever be able to get one thin dime from me in court. My GC did not pay the sub. Sucks to be him, but it's not my problem.)

I immediately contacted a lawyer and we got the ball rolling on a threatening letter to the sub explaining in excruciating detail why the lien was BS. He agreed to sign a lien release if I agreed to sign a release of liability. My lawyer and I are waiting for the sub to sign these docs, which he said he would do. We should have them in hand this week, hopefully filed with the county the end of this week or early next.

Start to finish this process will have burned up 2 months and $200 of my money...and that's friend prices. And that's me being proactive and the sub being civil, agreeing to talk and deal, and not dragging their feet.

I doubt you'll get this resolved in 60 days.

[txgolfer130]

Originally Posted by cris006

I've cancelled the inspection until this is resolved and expect no further expenses. Does anyone have any insight or opinion as to the likelihood of this being resolved in less than 2 months' time? That is my window before HUD delists the property.

LOL! Possible, but EXTREMELY unlikely. Probabilities are in the 95-98% range it doesn't happen in time. Unless you want to spend money and get a lawyer involved...but even that won't guarantee the 60 day window.

[mSooner]

I'd walk at this point unless this house is a real deal. Buying a foreclosure that had no issues like this was hell for us and took SOOO long with so many threats. I doubt 60 days will be enough.

[skids929]

Run as fast as you can..There are too many homes with clean titles to bother with this one.

I am at the tail of a nasty title issue. Took 4 years to resolve. The land laws aren't in your favor, and even when they are don't make much sense or have any teeth. I would recommend bailing.