Any Quiet Title Action stories out there?

Question

I wrote a blog post recently on BP about a NPN with significant title issues. The NPN was a HELOC originated by a big bank in 2005. They never obtained or recorded reconveyances for the two loans (one from 1983 and one from 1997) that were refinanced. Their practice was also not to get title insurance, only do a title search.

This sloppiness left the NPN in limbo as it's difficult for big banks and big attorney firms to make decisions and execute documents correctly and efficiently. When we bought the loan, we cleared up the two previous liens, foreclosed, rehabbed, and sold the property within 9 months. It was quite an experience and I lay out all the details in the blog post.

I'm curious to learn from other people's title "nightmares" and how they successfully cured the issues, especially the ones that required a full QTA. Anyone willing to share?

John Underwood · Answer

I have done QTA on tax deed properties. I have also cleared up issues by addressing any clouds on title by getting a QC deed from previous owners and mortgage release from old mortgages. Much cheaper and much faster.

I paid the people $200 for their time to sign a QC deed and then was able to do a title search to make sure everything was cleared up and then get a normal title insurance policy from an attorney. I then sold one of the properties with a general warranty deed.

Chris Seveney · Answer

@Andy Mirza

I have one going on right now where property owner passed away and title was passed by the kids to another individual but there was no recorded document that showed the kids had the right to sell the property. Who knows if there were more kids or if any objected? So now have to go through quiet title to get it cleaned up.

Davido Davido · Answer

@Andy Mirza,   No one was really interested in minerals on the property.  No testing had been done.  I doubt that restoring the mineral rights would increased the market value for most people.   However, my acquaintance was in tight with a community that I would call religious minded survivalists and he was reselling to them. Their community had a high value on privacy and on "exclusive ownership".  In fact, multiple people from that community where interested in the property specifically because of its remoteness (a factor I saw as a negative).  It was because of their desire for privacy and seclusion that they were also particularly interested in having no liens or easements.

The religious buyer who was willing to pay the most, would only pay top dollar if an old lien was removed and the mineral rights were restored.  My acquaintance taught me a new trick by including the holder of the mineral rights in the Quiet Title action -which was initiated primarily to remove an 9 year old lien, that expired automatically in 10.   I do not have the details of how much more the buyer was willing to pay for the mineral rights.  There were also some questions about redemption rights.  I had put the property had been through a sheriff's sale.  All title questions were removed by the Quiet Title.  We already new that the old lien holder and the holder of redemption rights would not respond.  The lien holder was dead and the owner of the redemption rights was in hiding overseas.

Andy Mirza · Answer

@John Underwood For NPNs, the main issues I would expect to see are old mortgages that were paid off but never had the reconveyance recorded. The reconveyance would be to the mortgage what the Quitclaim would be to ownership. One of the problems of old mortgages is that it gets hard to find old lenders that are no longer in business. Once you exhaust your leads for a successor or responsible party, your only recourse might be court....

Andy Mirza · Answer

@Davido Davido Great story! A very unique situation that probably doesn't come along often but kudos to learning something new that adds value.....

Andy Mirza · Answer

@Davido Davido Interesting idea and sounds like a great niche. How significantly did the land gain value by getting its mineral rights back? Seems like it might be a case by case basis, right? Did the acquaintance do any testing to see if the mineral rights were worth getting?

Andy Mirza · Answer

@Chris Seveney Are you doing this as the mortgagee prior to foreclosure or as the REO owner? In our situation we dual tracked the QTA and the FC to save time and it worked brilliantly.

Davido Davido · Answer

An acquaintance of mine filed a Quiet Title suit with the primary goal of restoring the mineral right to 40 acres of timber land.   He said that the companies who hold mineral rights seldom respond to a Quiet Title suit involving small acreage.  If they don't respond, they loose their mineral rights.  He was successful in restoring the mineral rights.   It was a novel idea to me.  I sold him the 40 acres.

Any Quiet Title Action stories out there?

Most Popular Reply

Contact Us