there is a house I am trying to do a short sale on. I got permission from the owner to talk to the bank. I also got a quitclaim deed from the owner. The problem is that the bank cannot find the mortgage for the house. It also never went to a sherifs sale when it was supposed to. I was wondering if the bank can't find the mortgage does that mean I automatically own it, or is there a legal process I have to go through? I would apreciate it if someone who knows a lot about short sales and real estate law to answer this please!!
2007-02-01 14:12:57 · 4 answers · asked by ? 1 in Business & Finance ➔ Renting & Real Estate
Get a title report on the home (from any title insurance company). Banks don't just forget about loans so my guess is that the owner doesn't even remember who the loan is with since they never paid on it. The loan could have been sold as a scratch & dent to another mortgage company since he didn't pay
On the report there should be a transfer history of the lien. If they cannot find it and they issue a commitment on the home then they are liable for it. Then you should be in the clear & if anything comes up they are liable for it.
2007-02-01 15:02:24 · answer #1 · answered by Nicholas M 3 · 0⤊ 0⤋
I once listed and sold a house just days before it was too late - it went for 11 missed payments, because the loan got sold in the middle of that and then came Christmas and they thought the paperwork was just misplaced, so the bank that held the note didn't start foreclosure proceedings until way late. Your note may also have been sold to another lender....
On a regular short sale (the bank knows where their paperwork is) they will want to see a contract, and for you to take it all the way to just before closing so the closing agent (title company in Texas, lawyers in some other states) can send them a HUD-1 (settlement statement) showing how much they would get. They will also want an appraisal done to see how much the house is worth. At this point (a day or two before closing) the bank will evaluate the whole thing and decide IF it's enough money or if you need to raise it a bit.
Note that a short sale (from the bank's perspective) is to sell a house for it's actual value even though that does not cover what's owed. It's not just to let it go so you can get a good deal.
Have a title search done to see if in fact it has been sold to an investor already - have you filed your quit claim deed? A title search may also show if the loan has been sold. Try to find out who the tustee is - that's who sells it at the courthouse steps for the bank. Maybe they haven't sent out the proper letters yet and that's what held it up. A title search will also tell if there are other liens on the property. The trustee has to notify them of the foreclosure and give them a chance to buy it first.
2007-02-01 23:06:14 · answer #2 · answered by teran_realtor 7 · 0⤊ 0⤋
That is an interesting problem. I think I would like to have my mortgage with this company. If you are signing a quit claim dead, you now have an interest in the property. I must ask, how do you know it is in foreclosure if the bank can't find the mortgage? If the bank does not know about the foreclosure then I would live in the home until the bank wakes up. You may consider taking the property "subject to" ie the existing mortgage staying in place. That way you can enjoy the benefits and a poorly run bank.
2007-02-01 22:37:00 · answer #3 · answered by RN 2 · 0⤊ 0⤋
On the report there should be a transfer history of the lien. If they cannot find it and they issue a commitment on the home then they are liable for it. Then you should be in the clear & if anything comes up they are liable for it.
2014-01-15 10:51:01 · answer #4 · answered by Anonymous · 0⤊ 0⤋