Zombie home mess

[Kristi Mollohan]

Hi

Newbee here, I think this is very interesting and helpful!

Now here's my issue, bought a House to flip and it turns out it's a zombie. Young guy sold us the house with warranty deed. We try to take out loan to finish remodel and find out it has a bank lien on it in his sister's name, she owned the house before him. It has been filed since 2000 and was never acted upon. We can't get a loan or sell the property. We bought the property in 2014 for $5000, we have put appx $40,000 in it. Lawyer says Ditec can still follow through on lien for next 4 years and may be able to for next 10 years. Young man has been trying to sort things out with us. The lien is for $41000.

We are afraid that if the sister contact's the bank for the release they will now see it's worth something and take our home, is that possible? We want it cleared up so we can sell it this fall but should we just sit silent for the four years? Do we actually own the Home, our name is on the deed? Will the bank say that we now owe them  the debt that she owed?

Thanks