3 attorneys, no answers - Unique situation!

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JAEDRAY

LoanSafe Member
Dec 9, 2008
10
0
0
"bought" our home in 2004...
found out in 2011 we never owned it.
Now we have the deed in our name, with no leins!

We purchased our home in 2004 on contract (but through a realtor and closed at an attorneys office) and 2 years later secured traditional financing. Flash forward several years, and the house next door sold, revealing that our name was only on the 10x150 strip of land between the 2 homes.

So the home that we have been in for years, belonged to an heir of the gentleman we bought on contract from. They re-opened his estate and she signed the deed over to us, and it is recorded at the courthouse in our names, with no mortgage or leins.

We tried for over a year to get our mortgage company to acknowledge this issue. It finally took missing several payments for them to communicate with us. Honestly we were/are angry that our payments were going to a 10x150 strip of land.

They say that foreclosure proceedings are on "hold" and they are trying to correct the deed. This has been going on for several months.

My legal questions are: A) Can they change the deed without our permission? All original loan papers that we signed have the incorrect legal description. We truly did unknowingly only sign for 10'
and B) Do we have any rights based on the fact that all documention and loan papers we signed were written incorrectly?
 

JAEDRAY

LoanSafe Member
Dec 9, 2008
10
0
0
yes, but technically they were both correct. I spoke to the title company and they assume no fault because they searched the parcel # that was provided to them (the 10') and the title came back clear. The strip of land between us and the neighbor has it's own parcel # for some reason. All loan documents that we signed read that we were buying "XXX Address (our home address)"... "legally described as (insert 10' description)."
 

JustSharon

LoanSafe Member
Sep 8, 2011
184
0
0
JAEDRAY:

I agree that this is a unique situation. Obviously, you will need an attorney who is experienced in real estate matters.

A whole bunch of questions come to my mind: (I don't mean for you to answer these necessarily. It just looks like a lot of folks dropped the ball on this one. I think somebody is going to have to answer these questions eventually.)

Did the mortgage company make you get an appraisal (or did they get one) for the 10' piece for the amount of the mortgage?
Did they think that a 10' piece was your "primary residence"?
Did you or the bank have a survey done?
What have you been paying taxes and insurance on?
Who drew up the deed? Who drew up the mortgage?

I do not believe that anyone can "correct" the mortgage or the deed without your signature (but talk to your attorney). If this is the case, I would hate to be in the Bank's shoes. The mortgage they have is secured by a 10' piece of property nobody wants. I understand that you are upset about paying a mortgage all that time for a 10' piece of property, but maybe there is another way to look at this.

What would happen if you just stopped paying and walked away from that 10' piece and let them foreclose on it? You have the deed to your actual house now and no mortgage on it. The foreclosure would hurt your credit, but would it be worth it? I don't know how much money is involved, but you have only been paying the mortgage for 8 years. How would it feel to own your house free and clear and let the bank have its 10' piece?

As part of straightening this mess out, ask about getting a new title insurance policy with the correct property description.

Just food for thought. See what your attorney says, but don't assume that the bank has you over the barrel; it might be the other way around.


Sharon
 

Jeffrey L. Shurtliff

LoanSafe Member
Dec 4, 2010
3,823
139
63
"bought" our home in 2004...
found out in 2011 we never owned it.
Now we have the deed in our name, with no leins!

We purchased our home in 2004 on contract (but through a realtor and closed at an attorneys office) and 2 years later secured traditional financing. Flash forward several years, and the house next door sold, revealing that our name was only on the 10x150 strip of land between the 2 homes.

So the home that we have been in for years, belonged to an heir of the gentleman we bought on contract from. They re-opened his estate and she signed the deed over to us, and it is recorded at the courthouse in our names, with no mortgage or leins.

We tried for over a year to get our mortgage company to acknowledge this issue. It finally took missing several payments for them to communicate with us. Honestly we were/are angry that our payments were going to a 10x150 strip of land.

They say that foreclosure proceedings are on "hold" and they are trying to correct the deed. This has been going on for several months.

My legal questions are: A) Can they change the deed without our permission? All original loan papers that we signed have the incorrect legal description. We truly did unknowingly only sign for 10'
and B) Do we have any rights based on the fact that all documention and loan papers we signed were written incorrectly?
Depending on your recording laws and the laws of erroneous recordings, pursuant to your state law; you may have a unique situation here of an erroneous recording of the deed. The problem here is what justification would be used to change the deed. If this is true then whoever has a lien usually is put into first place. You may want to clarify who is in first place at the recorder's office. If you are and the lien says you have "ownership" "sole ownership" then you own it and your deed has presumption and the other claim is moot. You may want to look at a Quiet title action, you need to see an attorney. Not an attorney here, but you could record a Statement of Facts Instrument on the property citing your arguments using Common Law doctrine to bar them from foreclosing. Promissary Estoppel or equitable Estoppel comes to mind here. This would stop them from changing the deed, without your permission or knowledge. This is just a thought though. You also need to continually monitor the recorder's office listing. What for possible releases.
 
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JustSharon

LoanSafe Member
Sep 8, 2011
184
0
0
Jeffrey (and JAEDRAY):

As I undertand JAEDRAY's situation currently, he now has a recorded deed for his actual residence from the original seller's estate - with NO LIEN attached. JAEDRAY also has a deed for a 10' strip of property adjoining his house. The bank has a lien ONLY on that 10' piece of property. The bank has no lien on the residence itself. I think the only thing the bank can foreclose on is the 10' strip -- because that is what they have a lien on.

I think that the bank has "kindly" decided not to foreclose at this time because they realize they are in a bit of a fix.

The error that caused the original problem was made by whoever drew up the original mortgage and the original deed -- perhaps the bank itself! I don't think this is an erroneous recording of a deed/mortgage; I think it is recording of an erroneous deed and mortgage -- a mistake that nobody (including the bank and lawyers) caught at the time.

What the bank will probably want to do is change the MORTGAGE to make it refer to the house property parcel not the 10' strip parcel. I don't know that they can do this unilateraly. Seems to me that JAEDRAY would have to sign the new revised mortgage. If so, JAEDRAY needs to be sure that the new mortgage is what he really wants. He may have an opportunity to ask for a lower interest rate, make sure that he is not charged with any late fees, etc. Or he may actually have the option of just walking away from that 10' strip and letting the bank have it (both literally and figuratively!). Then watch the bank try to sell that 10' strip for what they have in it! The thought of that just makes me salivate.

JAEDRAY also needs to know what parcel he has been paying property taxes on all these years -- on his own residence? or on the 10' strip. Has he been paying taxes directly to the town? Or has he been paying taxes to the bank who in turn pays them to the town. Has the bank been paying taxes on residence? or on the 10' strip?

Of course this all needs to be sorted out by a good lawyer. I don't think this is a case for do-it-yourself law.

JAEDRAY, could you keep us posted on developments?

Sharon
 

JAEDRAY

LoanSafe Member
Dec 9, 2008
10
0
0
Thank you so much for your informative answers. We certainly do need a lawyer! We live in a relatively small town. Lawyer #1 declined because he knew too many of the "players". Lawyer # 2 was the one who assisted with the original contract sale and owned the title company, so naturally no help there. We drove an hour to see lawyer #3, and he knew some local folks too. Guess I'll have to go even further! I'm going to the courthouse today to make sure nothing has been altered.
 

RyanJP

LoanSafe Member
Mar 31, 2010
421
6
18
I'm kind've in agreement with Justsharon here.

You need to take a look at your yearly property tax statement and look at what parcel is being referenced.

Two ADDITIONAL possibilities come to mind:

1) What does the COURTHOUSE say you have been paying taxes on? I assume that SOMEBODY has been paying taxes on that 10'x150' parcel of land, or else the municipality would have been screaming about it YEARS ago.
2) If you have been paying taxes based on the parcel with the home built on it but did not own the home, was the estate ALSO paying taxes on that parcel of land?

Does your bank financing have traditional escrow, or did you pay the taxes directly?

My assumption is that taxes have been being paid on BOTH parcels, or else you would have learned of the error within a year or two after taking residence when you got the collection notice from the tax authority.

My further assumption is also that you have been deeded a property that has no liens attached to it, and therefor own it free and clear, and nothing the bank does can alter that unless YOU voluntarily let them. BUT, that all depends on what your mortgage was based on.

Jeffrey's suggestion of doing a Quiet Title action doesn't apply (I don't think) because you already have ownership of the house (a deed in your name with no lien attached to it).

This is absolutely the domain of an experienced lawyer. I actually applaud the lawyer that was honest enough NOT to take the case because he was biased.

What state do you live in?
 

JAEDRAY

LoanSafe Member
Dec 9, 2008
10
0
0
We live in Indiana.
We have always paid taxes on the parcel that the house is on (through escrow with the mortgage payment). Never have been billed for the 10'.
So any suggestions on finging an awesome lawyer?
 

Cat Damiano

Mortgage Wars
Sep 10, 2007
10,541
39
48
Colorado
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Corey Vandenberg

LoanSafe Member
Jul 22, 2017
4
0
1
48
Can we get an update? What happened? While this is unfortunate situation, surely you are not trying to get away with no longer paying your mortgage because of a clerical error? This is not the lottery...