TITTLE ISSUES ON A MAJOR RENO FLIP

[Ivan Correa]

Looking to see if someone can assist with an issue on a property I purchased in 2020.

I bought a Heavy reno 1 family 25X100 property in NJ . Late February early March was when I closed. This was the second property we had closed on in the same period with the same attorney . This property was getting a lot of action I ran the numbers it would be a good flip so I offered below asking, cash, no contingencies, close in 10 days. It came down to three people I was told I could win this if I used the then owners tittle company so I said sure. Tittle was ran etc. My attorney at no point in time mentioned any tittle issues didn't mention any red flags said everything was ok so we closed. The world closed down I got covid some other family members as well so time passed by and I didn't get back to it until September- October (taxes were paid, lawn mowed etc.) We secured financing for the reno , in the refinancing portion of this when tittle was re-ran the lenders tittle company said they do no feel comfortable moving forward until these issues were taken care of. My attorney reached out to the tittle company that had insured it and he was told they would re-insure it no problem. I didn't feel comfortable doing all this work just to have a potential buyer's tittle company tell me this or force a potential buyer to use this company I don't know and obviously is not good. My attorney told me to file a tittle claim and he said it would take months , I tried to place it limitedly off market at a discount and cut my losses but no bites. A close friend with colleagues at a tittle company looked a the tittle search and said the following. 

(my)llc =my company

PREVIOUS LLC = the company that owned before me

THE LENDER TO PREVIOUS LLC Inc.= The name of the fund that transacted with the previous owner and seem to have some sort of personal relation to each other. 

NAME = the owner of PREVIOUS LLC

"Upon review, I agree with most of the issues raised by the other underwriters.

The Deed in Lieu of Foreclosure and the Power of Attorney appear to have been made contemporaneously with the mortgage, and would affect the borrower’s right of redemption, and is often held to be unenforceable.

The Power of Attorney does not appear to have been used by the mortgagee to convey the property. The POA looks like it was only used to sign the Seller's Residency Certification, the Affidavit of Consideration, and the Estoppel Certificate. However, The DIL was executed by NAME as Member of PREVIOUS LLC.

There is also a break in the chain of title. The PREVIOUS LLC took title via the DIL. However, THE LENDER TO PREVIOUS LLC Inc. conveyed title to (MY) LLC. Further information would be needed as to how these entities are connected.

We would also require a deed (or multiple deeds) out of PREVIOUS LLC and The
THE LENDER TO PREVIOUS LLC Inc. to (MY)LLC. The deed from PREVIOUS LLC could not use the POA to execute it. A copy of the original mortgage from PREVIOUS LLC to the THE LENDER TO PREVIOUS LLC Inc. should also be obtained for review to confirm that there are no further issues.

Would an attorney be able to clear these up???

I reached out to my attorney and was told ;

"I would be happy to assist you in resolving this if your new title company has a new plan of action to resolve title. However, further involvement on my part is beyond the scope of my original representation and we will need a new retainer agreement for this work and a deposit on said retainer. As a courtesy to you, I have already expended significant time assisting you in attempting to resolve this issue so it is only fair that I am paid for work moving forward. I will require a $1,500 retainer and bill @ $250.00/hr plus any costs against this retainer. Any unused retainer will be returned to you."

What I am looking for is assistance in creating an action plan or being pointed in the right direction to resolve this issue so that I can clear tittle and either sell it or finish the project . Who is at fault here for me not being warned about tittle ( Attorney, tittle, me)? Has anyone ever done a tittle claim? How long does it take ? Do I have a good chance of wining the claim? 

If you have been in a similar situation or you're an attorney or work in tittle please do no hesitate to reach out I appreciate any help!