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Old 10-11-2010, 06:22 PM
 
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Is it possible for a foreclosure to be nullified after it's fully gone through the process (ie, owners evicted, house put on the market, and maybe even re-sold)?

Seeing as there are likely about to be an awful lot of lawsuits related to foreclosure practices, is it possible that people could get their house back (ie, if the bank is found to have used fraudulent docs, or can't find the necessary deed or loan docs)? What happens to the new owners if this can occur?
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Old 10-12-2010, 07:49 AM
 
Location: North Las Vegas
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Quote:
Originally Posted by Robustus View Post
Is it possible for a foreclosure to be nullified after it's fully gone through the process (ie, owners evicted, house put on the market, and maybe even re-sold)?

Seeing as there are likely about to be an awful lot of lawsuits related to foreclosure practices, is it possible that people could get their house back (ie, if the bank is found to have used fraudulent docs, or can't find the necessary deed or loan docs)? What happens to the new owners if this can occur?
Your asking a very important question, and yes that is a possibility that is why the banks have instituted a foreclosure moratorium If it was just a matter of fixing some clerical error there would not be this be considered such a big deal like it is.

Everyone needs to pay close attention to what is going on whether you purchased a few years ago a foreclosed home or just recently. Any one purchasing a distressed property should consult and attorney as well.


There are lawsuits currently going on not only between home owners and banks over foreclosures but also buyers and banks over foreclosures. Sales are being canceled in some cases right now, and bank owned properties that were listed for sale are being pulled until they can find out if the properties were foreclosed on legally.

This is a pretty good article on why this foreclosure moratorium came about and what it's going to take to fix it and who is affected.

A Primer On The Foreclosure Crisis
  • Why is the foreclosure machinery of our nation’s largest banks suddenly grinding to a halt?
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Old 10-12-2010, 09:03 AM
 
Location: Beautiful Upstate NY!
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It used to be so simple...you pay your mortgage...or you lose your home.

Is anyone suggesting that someone that doesn't pay their loan, gets to keep their house for free?
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Old 10-12-2010, 10:19 AM
 
Location: North Las Vegas
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According to all the information that is coming from the banks and the government home owners for the most part won't be able to keep their house for free, what is happening is in some cases people may have been foreclosed on that were making their payments amongst other issues while trying to work out some kind of modification. No one is saying that home owners that weren't paying their mortgage should keep the home. There is so much more to this story it's unbelievable.

It's been reported by many housing watch index's as well as news stations like CNBS and more that in some cases when the home was foreclosed on the bank that actually had the loan didn't foreclose it was another bank who may have sold the note to the invest or bank that has the loan now. The paper trail is a mess in some cases, what it boils down to anyone that was foreclosed on by a lender that didn't hold the note was an illegal transaction and any one purchasing a property that was foreclosed on illegally COULD I am not saying will but could end up losing the home since it was sold illegally.
It's like purchasing stolen merchandise, it's against the law. According to the housing industry they they reported that the Robo signers have admitted to signing without checking the documents and even forged signatures in some cases they have found where the robo signor signed as a representative to both the selling bank or investor and the investor or bank that purchased it in the same day. A robo signor cannot work for two different banks at the same time handling the same sale again that is illegal.
Since this is all new information coming out there will hopefully be better information to help sellers and buyers. National association of realtors is going to be meeting with the lenders in next few days to get answers to pass along to us realtors to pass along to sellers and buyers.
Hopefully we can have more answers to questions that are coming in,in the mean time you should watch for any news coming out in the news papers and internet.
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Old 10-12-2010, 03:40 PM
 
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Quote:
Originally Posted by 007 license to sell View Post
...The paper trail is a mess in some cases, what it boils down to anyone that was foreclosed on by a lender that didn't hold the note was an illegal transaction and any one purchasing a property that was foreclosed on illegally COULD I am not saying will but could end up losing the home since it was sold illegally.
It's like purchasing stolen merchandise, it's against the law. ...

Yeah, this is quite a worrisome possibility. I imagine that the vast majority of foreclosures were in fact legit (with docs to prove it), but there probably will be some cases where they weren't, or where they lack the docs. If that happens in a case where someone has purchased the foreclosed property, what happens? Does title insurance kick in? If so, what exactly would that entail?
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Old 10-12-2010, 04:30 PM
 
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This is very troubling to me. I imagine things could get very dicey, especially if there have been multiple sales since the forclosure.

My current house was foreclosed last year, purchased by a flipper, then I bought it in February. If this was an illegal foreclosure, am I S.O.L?
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Old 10-12-2010, 04:54 PM
 
Location: Salem, OR
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Quote:
Originally Posted by MizzouGypsy View Post
This is very troubling to me. I imagine things could get very dicey, especially if there have been multiple sales since the forclosure.

My current house was foreclosed last year, purchased by a flipper, then I bought it in February. If this was an illegal foreclosure, am I S.O.L?
In theory, title insurance should kick in, but I say maybe...

There is often an exception in the title insurance that gives them an out in case of fraud. For the foreclosures where the lenders actually committed fraud by making up documents...you could have issues. Not every foreclosure will have problems. Many will turn out to be just fine. Unfortunately banks need to figure out which ones are which and that will take a while.

It's just a mess.
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Old 10-12-2010, 05:03 PM
 
Location: Union County
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Title insurers won't be as apt to continue paying even after being insolvent like the FDIC... unless of course, we bail them out.
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Old 10-12-2010, 11:01 PM
 
Location: Paranoid State
13,046 posts, read 11,469,665 times
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Quote:
Originally Posted by MizzouGypsy View Post
...My current house was foreclosed last year, purchased by a flipper, then I bought it in February. If this was an illegal foreclosure, am I S.O.L?
If I were you, I'd go buy an hour of a real estate attorney's time. It may help you sleep soundly at night. Or it may cause you to hit the bottle. Either way, knowledge is better.
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