All Forum Posts by: Doug Seaney

So we just bought a 3 bed 2 bath house from Freddie Mac for $24k (cash purchase).  Yes a major fixer upper!  I was telling an acquaintance about it and he said "oh you bought that?,  I heard the bank foreclosed on the wrong lot."  I called a survey company to provide me a mortgage survey and they got back to me letting me know they had done a survey on this property about 20 years ago and sent me that survey.  The house sits on an adjacent  lot to the north in a subdivision.  The tax id that I bought is meets and bounds.  the old survey shows the legal as lot 15and 16 and also the SW 1/4 of the S 1/4 lying east of the railroad.....  The mortgage from 20 years ago used the correct legal, but the last 3 mortgages failed to include lot 15 and 16.  so the bank foreclosed on what they legally had a mortgage on, it just didn't include the house. 

I called my realtor and he is to check with the listing agent as well as the title company and Freddie, haven't heard anything back yet.

I talked to an attorney at a different title company that I know and she said if the bank still owned it they could file suit to have the legal description amended, but as they didn't own it any longer she wasn't sure if that could happen.  She also said that the survey / encroachment exception in title policy was not intended to waive missing an entire house, but more for the odd 10 foot issue.

During the purchase process I asked the local assessor for the fact sheet on the house and the tax ID with the meets and bounds shows the house on that and NOT in the subdivision.  With this in hand and having done hundreds of deals without a survey I felt comfortable that I was buying what was presented. 

Freddie and the listing agent listed a house for sale not a vacant parcel - not sure who is culpable in all this?  Listing agent, assessor, Freddie, me, title company, original bank?  oh and the best part is we were about a dumpster full of demo along in the house that I don't really own!

I'm giving my agent another day or 3 and then off to a RE attorney to see if he can untangle this mess.

Has anyone here had similar happen?  I am thinking if I can get Freddie to assign the deficiency balance / judgment to me then I can go to the owner of the subdivision lots (yes same owner as the foreclosed lot) and trade her a full release of the judgment in exchange for the lots.

Not sure of exact legalities but I can tell you people use student loans for all manner of things, cars, debt consolidation, etc.  If you don't think you'd be sticking around the area renting to students could be a real nightmare with out a very strong property manager.  As to financing the rest of the deal - you are right you'd be very hard pressed to find a lender willing to jump in on that deal.  you may have to go the bank of Dad or Mom:)

Hello all;  I've used this site to search out answers in the past and am now joining.  I landed back here in a search for tax advice on cost basis.  I recently down-shifted to part-time work in my career as a money lender.  We have 4 houses in 4 different towns; Atwood, Charlevoix, Central Lake, Bellaire.  It's a N. MI thing I guess, we are accustomed to driving 30 minutes to get anywhere!  Just closed on 5th house, this is second one in Bellaire MI.  This one may be a rental, but we are considering living in it and renting out current home.  If we do that I am sure i'll be back for tax advice on converting from personal residence to rental property.  I am 52 and using rental income to bridge the gap after switching to part-time work until I turn 59.5 or maybe until SS starts at 67. 

Best piece of advice I ever received was to take a look at the potential renters car - how they keep their car is a good indication of how they will keep your house.