All Forum Posts by: Peter Walther

It happens more frequently than you might imagine, I've handled dozens of title insurance claims based on forged deeds, mortgages and satisfactions of mortgages.  I belong to an investor group and one of the members was telling me he flipped a house and was sued by the buyer's title company for unjust enrichment when it turned out the deed into him was forged.  I explained to him that's exactly what I would have done if I was handling that title claim.

Nobody can steal the title to your house.  If someone signs your name to a deed, the grantee did not get title.  Likewise, if someone forges your signature on a mortgage the lender did not get a lien on your house.  These clouds on your title however, may well be a pain to clear and you need to know how to go about doing it.

You should always get a title policy when you buy property or lend against it but most policies don't cover post policy matters.  There are some policies that cover after the fact matters but they're more expensive and are not available in all states.

Contact the County Clerk where the property is located and ask if they provide a notification service if any docs are recorded that purport to affect your property.  Many have started to do that because of an increase in forged docs in many parts of the country.

I'm not an attorney but I can't think of a reason why they would. You don't have a relationship with them, why would they have liability to you for not having insurance that meets some lender's requirements before the lender will lend you money? Maybe the Seller might have a complaint if the deal doesn't close and the HOA failed to have insurance in place that doesn't meet the requirements of the HOA's covenants, but if the insurance meets the covenant's requirements but not the lender's, I think the Seller would be out of luck also.

As I understand reverse mortgages, on the death of the Borrower, the heir(s) have the right to obtain a release of the mortgage for 95% of the current appraised value of the property. So if you're willing to pay something for the heir's assistance in getting a release of the property you might be able to do that, but of course that means paying close to or above market value for the property. In the alternative, if you obtain title from the record owner, a quiet title action might bring HUD to the table to talk about what it would accept to release the property, or if they fail to respond to the Complaint you may be able to get a court to declare to lien extinguished. I've had some success doing that. I've flyspecked the chain of title to find any flaw or defect to find something to allege why the lender doesn't have a good lien In addition, I've also alleged the lender has abandoned its interest by failing to bring a foreclosure in a timely fashion. You really talk with a good real estate attorney who practices in the county where the property is for advice. By good I mean someone who has experience with quiet title actions, most attorney's don't have that experience.

Have you tried to identify who owns the zombie houses and what liens are on them.  Is it possible to contact them and maybe get title to them and either repair if possible or remove if necessary? Have you contacted the government authority with responsibility for code enforcement, i.e. County or City and see if there aware of the houses, have they been cited for code enforcement violations, is it possible to have them removed at the government's expense if they are so bad they're a safety hazard?

To begin with I'd probably stop work on the house until you confirm what the status of the title is.  Your post says you closed on a flip.  Did you get a title policy issued to you or whatever name you put title in?  If you closed yesterday the policy probably hasn't been issued but did you receive a title commitment and did you pay for a policy?  Have you contacted the title agent and if so what did they say about the situation?  If you are an insured, notify the title underwriter, the company the policy is issued on not the agent that issued the policy, in writing, immediately.  Get contact information from the agent or look at the policy for information on where to submit a claim or check the underwriter's web site for information on how to submit a claim.  Keep in mind, if the allegation the attorney in fact did not have authority to convey title, and there is a total failure of title, the insurer will probably only have liability up to the amount of insurance.  So if you bought the property for $100k and the policy was issued in that amount, that's probably all you'll be entitle to under the policy.  Any additional loss you suffer will probably not be covered under the policy.  I'm not an attorney and this is not legal advice, it's just what I think after having done title claims for over thirty years.  Let me know if you have any questions after you get more information.

Unless your getting seller financing I suspect the lender is going to want a lender's title policy.  If so the additional cost of getting an owner's title policy issued should be nominal.  Even if you're not buying a lender's policy, not getting an owner's means your self insured for any problem that a title policy would cover.  I understand you're buying from a relative but that doesn't mean a problem can't come up.  A lien or encumbrance your relative doesn't know about, a neighbor who thinks the fence in the backyard belongs closer to the house your buying reducing the backyard to nothing, an error in the legal description that started three owner's back.  These are all things that can cause you headaches and money in the future.  If your not getting a title policy are you also not buying a casualty policy in case the place burns down?

Hi Scott, I'd probably shop around for several quotes and as long as the low bid is from a well rated insurer with minimal complaints from insureds I'd go with that.

Hi Amy, you can push back but depending on which document it is, the title company may not have any flexibility.  For example if you're the seller and it's the deed you're writing about, the deed needs to be in recordable form.  Therefore a copy probably won't do.  Same thing if you're the buyer and it's the mortgage (or deed of trust) that's been misplaced.  If it's an affidavit the title needs for internal purposes, they may be able to waive the requirement for an original.  Good luck on your closing.