All Forum Posts by: Kalman G Szabo

Thank You All for the constructive answers. I got confirmation from a title company here in Pittsburgh, that 20 years past the maturity date they do indeed insure the title.

@Peter Walther, just did, it seems to be fine in PA as well. I believe the 20 years you are mentioning is the statute of limitations in FL (since you are based there). Coincidentally, it is the same for mortgages "signed under seal", which I believe are pretty much all mortgages.

https://www.solosuit.com/posts....

Hey @David Ramirez,

Yes, I know that's a way to deal with it - I wrote it in my post, but that might be overkill. Done quiet titles in the past but now I am looking for smarter solutions for this specific case.

Also, what state you are in is important. PA does not have a statute of limitations for mortgage foreclosures, while FL has, so this would be a non-issue in FL.

Dear Fellow Investors,

I have a question related to title.

Bought a house on sheriff sale, has an unsatisfied private person mortgage from 1986, with an expiration date in 1996. Mortgagee deceased, her trust was holding the note, and satisfaction was not recorded. Presumably, the sum was paid off, anyways, no foreclosure on the mortgage ever started in 26+ years.

Afterward, Bank of America did lend a substantial amount on the house (75K) in 2013, which was roughly its value back then (now it's 200-220k). This was the foreclosing mortgage on the sheriff's sale we bought. This is only important as much as the previous unsatisfied mortgage didn't bother them.

Question: should I worry about cleaning up the title if I were to sell the property? Obviously can be done with a quiet title, however, that might be overkill in terms of cost and time. Various sources state that after 20 years passed from the final due date a title insurer can add an exclusion to the policy. Otherwise, PA does not have a statute of limitations on starting mortgage foreclosures.

Does anyone have experience dealing with such in a more efficient way? E.g. title insurance exclusion, etc.?

Thank You!

P.S.: @Steve Babiak, @Chris K., @David Krulac, I believe you guys have an idea on the above.

Hi Liz, the market is strong here but you don't see properties sold on the MLS with tenants/owners in place as often as in other, more saturated markets (I have experience with Boston, Seattle and Northern NJ). I am not saying that it's unheard of but it's not as common as in really cut-throat coastal markets.

As for discounts, because of the lack of data its hard to say any number which isn't pulled out of a certain body part. It also really depends on how the people are who occupy the property (trashy/intimidating vs neat young professionals who are just squeezing out the last few months of free stay). Depending on property value as well - Pittsburgh is this weird place where $30k and $300k properties might be sharing a wall in certain areas - ejecting someone from a property costs the same (money- and time-wise) regardless of property value.

In any event, the sheriff sales are also very competitive these days (low inventory due to moratoria) so it's very likely that it will sell unless the mortgage is upside-down. I might also be interested in buying your property in case the numbers work (feel free to PM).

Case in point about challenging the distribution, this happened to another investor here in Pittsburgh: the defendant vandalized the property right after the sheriff sale out of spite. There was a large payoff coming the defendant's way that afaik they never received because the 3rd party investor put in an emergency motion to stop the distribution. Of course this only helps you if the defendant is getting a large payoff. I believe it will take a while to get that mess cleaned up but there's some hope at least.

@Steve Babiak, that's good point, thanks for sharing! In this case I'm actually pretty lucky as there is no Estate (or rather decedent file) formed yet and the money is still unclaimed. I will update the forum once I achieve something.

At the very least this has been very educational and beneficial I think not only for me, so many thanks to everyone for all the insight!

@Chris K., I am aware of the risks of sheriff sales, I bought my fair share of properties there (obviously not in the volume as David Krulac has), most of them very successfully. In the above 2 cases the cumulative sum of the 2 outstanding liens is not more than $15k, so they aren't anywhere close to deal-breakers.

The intent of the questions is to figure out certain tricky situations as the ones mentioned above and understand the minutiae of dealing with inheritance taxes for investors who obviously lack certain necessary information to file the returns. Basic title searches are easy to do, while this topic did create a heated discussion.

In the latter case payment to the Estate more than covers the inheritance taxes due with interest. The question is purely procedural: is an escheat considered to be an inheritance tax payment or  does one need to explicitly pay it off? As well as, what to do if you don't have an SSN for the deceased?

Btw, after researching this I found that opening and probating an estate is not necessary, it's enough to open a decedent file at the Register of Wills and direct payment there.

@David Krulac, yes, I didn't mean that the sheriff should have opened the Estate. In this case, there is evidence (within the paperwork accompanying for the distributions) that the plaintiff's attorney was inquiring by the DOR about opening the Estate and the lien amount, etc. in my opinion it is their duty (though of course if they fail to do so in the end, you still don't have recourse).

If you pay close attention to the distribution you see that the Estate is named as beneficiary to the distributions. At the very least, it would be misleading to name the Estate as the beneficiary of certain sum and then never actually opening the Estate. At this point, until the Estate is opened at the Recorder of Wills, the Estate is not an existing entity.

@Chris K., many thanks for the attached doc, this finally clears everything up.

Bringing up a previous question that was lost in the discussion and is still unclear: 

If the sheriff sale distribution doesn't explicitly pay off the inheritance tax by opening an Estate first even though there would be available funds, but returns the remaining sum to the Estate, which then eventually gets escheated to the Commonwealth (say because there are no known heirs, who would pick up the check), would the Inheritance Tax lien on the property then still prevail? You might think this is a made-up example, yet it isn't. 

Attached is a distribution from a sheriff sale in Allegheny County where the deceased had only unknown heirs and the foreclosure named the Unknown Heirs as defendants. The remainder sum was paid to the Estate of the deceased, however upon calling the Register of Wills, no Estate was found.

Thank You in advance!