Complicated Title issue on new construction loan (insurance, real estate, approved)
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I have searched for answers or a similar situation and can't find any. Really needing some advice here. We got a construction loan to build a new home. The land was several lots under the same loan and we could not afford to pay the whole amount off. The bank agreed to section off the lot we wanted to build on and release it from the original land loan via a loan modification agreement. Only as far as we can tell, they never went through with that. That means our house is built on a lot with a double lein. It is still included in the original land loan and it is now included in our construction/mortgage loan.
I am trying to figure out what our options are in the situation. The land only loan is scheduled to be refinanced in December. We have just been through a bankruptcy and are attempting to keep the land and the home. But we need to get this problem cleared up and I don't know how to go about that. I also don't know if there's anyway that we can use their error to force them to refinance the land at a reasonable rate. If anyone can offer advice or tell me where to turn to get the answers I need I would greatly appreciate it!
Actually I have talked to the bank. The problem is the person who handled our loan was way overworked and overwhelmed and so he quit after we had been approved. I've spoken to the new loan manager and she is aware of the issue but she feels like it is not her problem to solve I guess. We have tried going above their heads and we cannot get anyone to address it. We are considering taking legal action but I don't even know if we would have a standing.
this is far too complex for someone to answer here without access to all of the documentation. You need to get a lawyer who can let you know where things stand legally and what your options are.
Agreed (complexity). Gather ever email you can get your hands on, now. Do not depend on being able to find them down the road. Get both work and home emails.
Did you have title insurance when you did the construction loan? Hopefully, you didn't take a shortcut.
I was not aware that title insurance only covered the bank and not me unless I purchased a separate owners policy until I started researching this issue. I have bought and sold 3 homes before this and was never informed that separate title insurance was needed. Won't make that mistake again! Although it's a complicated issue, it's still in the banks best interest to do the right thing or else neither property can be sold in the future the way it stands. What type of lawyer should I seek, a real estate lawyer? Should I go to the lawyer that handled the loan or a different one? I appreciate the feedback.
I was not aware that title insurance only covered the bank and not me unless I purchased a separate owners policy until I started researching this issue. I have bought and sold 3 homes before this and was never informed that separate title insurance was needed. Won't make that mistake again! Although it's a complicated issue, it's still in the banks best interest to do the right thing or else neither property can be sold in the future the way it stands. What type of lawyer should I seek, a real estate lawyer? Should I go to the lawyer that handled the loan or a different one? I appreciate the feedback.
I'd start with the lawyer who handled your loan. If they were also given assurances that the lot would be split off they might be in a better position for follow up on that.
I was not aware that title insurance only covered the bank and not me unless I purchased a separate owners policy until I started researching this issue. I have bought and sold 3 homes before this and was never informed that separate title insurance was needed. Won't make that mistake again! Although it's a complicated issue, it's still in the banks best interest to do the right thing or else neither property can be sold in the future the way it stands. What type of lawyer should I seek, a real estate lawyer? Should I go to the lawyer that handled the loan or a different one? I appreciate the feedback.
Wow. You've had some bad luck realtor-wise! As a very uninformed, naive 25-year old first time home buyer, I remember my realtor sitting down and explaining everything (including title insurance) to me in detail. The realtor who I just used to purchase my second home had it easy since I now work for a title company. We went through my company, so at times, I knew more than he did, lol.
In some states it is standard for the seller to pay for the owner's policy.
Hopefully this will work out and now you will know for the future!
I was not aware that title insurance only covered the bank and not me unless I purchased a separate owners policy until I started researching this issue. I have bought and sold 3 homes before this and was never informed that separate title insurance was needed. Won't make that mistake again! Although it's a complicated issue, it's still in the banks best interest to do the right thing or else neither property can be sold in the future the way it stands. What type of lawyer should I seek, a real estate lawyer? Should I go to the lawyer that handled the loan or a different one? I appreciate the feedback.
I agree with Jack, call that attorney. What I am finding unusual, is you don't elect to get owners coverage, but it's something the buyer/borrower typically must opt out. Title companies assume you will take it out and most policies are offered at a discount when both are purchased. I can never remember a title company deciding on behalf of the buyer not to offer it. I've seen title companies require the buyer sign a statement acknowledging they understood what they declined.
When you chat with this attorney, subtly inquire if he was representing you (lol, not sure how to do that subtly), not the bank or the builder. Anything is possible. If you find out it's not you he was representing, stop talking and consult a real estate attorney. But something doesn't add up, don't put this off.
Have a call in to the attorney. There was only one lawyer present, does that mean it's likely he was representing the bank? Because it was a construction loan on property we already owned, I didn't think we needed our own lawyer. Boy am I learning a lot! The way title insurance has been explained to me in the past, no one has ever stated that it only covered the lender. I guess I assumed it covered the propert owner and I don't ever recall being asked if I wanted to purchase a separate policy or signing papers to opt out. Maybe this varies by state?
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