Foreclosure deed issues on REO?

Question

1 yr ago. A husband and wife's house was foreclosed on.
1 yr ago. Husband signed foreclosure deed.
Last week I signed a P&S on the REO, will close in < 21 days.
Today I saw a quit claim deed from last week where the wife sold the property to a person for $250.
I notified the banks Realtor and am waiting to hear back on what they are going to do.  
The mortgage was about $140k
Anyone seen anything like this?  I'm wondering how long this will be tied up now, or if it will even go through.

Thanks.

J Scott · Answer

Don't expect to hear anything from your agent or the listing broker (or the seller, for that matter)...

This is likely in the title company's hands right now, and their job is to ensure that the title is unencumbered by the time it gets to you.

In my experience, this could take anywhere from a couple days to a couple months, and in some cases, the seller will pull the deal and send the property to Fannie Mae to resolve the issue (in which case, you'll get your earnest money back, and the deal is canceled).

I current have one property under contract that's been with the title company for over 3 months (it's a great deal, so I'm in no hurry).  But, there's no guarantee it will ever close with me.

J Scott · Answer

Not fun!

Jim Wineinger · Answer

It may be up to a judge as well. 
          
          Worst case scenerio is since the wife never signed the foreclosure papers the bank did not have the rights to sell the property.
          
          This may be a while in closing as she did not sign foreclosure papers but did transfer her rights to the new person who now has the right to cloud the title with a suit for his rights (if he has any) to be determined by a judge.

John H. · Answer

I told my lawyer to hold off until I let the bank lawyers get back to me so I have no legal council at my fingertips (cheaper this way).  Its been almost 2 weeks now, and I still don't know whats going on.  My Realtor hasn't spoken to the listing agent as she has not returned any calls since the P&S was signed, but he did talk with her broker, and he said sit back and have a coffee.  Too bad I don't drink coffee.  Thanks for the reply's.

Eddie Ziv · Answer

Pretty much. Quit Claim, is exactly what it means. A person can quit his or her claim (Interest) in any said property if he /she had one. Now, if their interest is null and void by the bank based on the governing laws of foreclosure then the quit claim means nothing. That's why most sales are done with Warranty deeds rather then quit claims.

Dave Toelkes · Answer

If you agree with Roger, then agree that you can quit claim any property to anybody -- legally, even if you don't own the property.  All a quit claim deed does is transfer whatever interest you MAY have in the property, but does not guarantee that you have any interest.  If there is no interest, then the quit claim legally transfers nothing.

Eddie Ziv · Answer

I wonder how did you find about it? Did the title company notified you? I agree with Roger. You cannot QC something you have no entitlement to, Even if she signed the QC before the foreclosure, The person whom she QC to, has  lost it to the bank since the bank hold the note.

Roger Kelley · Answer

Consult local lawyer, of course...... but a QC only sells whatever right she MAY have in the property.If she has no right (probably,if the foreclosure was done properly), then she got 250 from a sucker. And I'll legally sell that sucker the brooklyn bridge, if I find them........ with a quit-claim.