Owner paid, but foreclosed on anyway.

[Bob Hubbard]

Owner paid, but foreclosed 2:52
A homeowner is stunned to get a foreclosure notice, despite having made her payments on time. KVBC reports.

http://www.cnn.com/video/#/video/us/2009/06/16/pkg.yearbook.fbomb.woio

 

[KELLYG]

Looks like these people were handling there affairs according to terms and still have a possiblity of loosing there home. That ranks real high on worst things that happen to good people list. I hope with the atterny's help they can get it squared away.

 

[terryl965]

They will most likely loose there home over this and then later be told by the courts that they was in the right. Then it will be too late.

 

[shesulsa]

Owner paid, but foreclosed 2:52
A homeowner is stunned to get a foreclosure notice, despite having made her payments on time. KVBC reports.

http://www.cnn.com/video/#/video/us/2009/06/16/pkg.yearbook.fbomb.woio

Uh ... is that the right link, Bob?

 

[Bob Hubbard]

http://www.cnn.com/video/#/video/us/2009/06/16/home.foreclosure.cnn?iref=videosearch

 

[Deaf Smith]

Always check the fine print and see if the banks have the right to call in their loans. If it's in the fine print, then they can call in the whole loan (either pay it off or else.)

Maybe they had a call loan.

http://financial-dictionary.thefreedictionary.com/call+loan

call loan:

A call loan is repayable on demand. Sometimes used as a synonym for broker loan or broker overnight loan.

A loan that may be terminated at any time by either party. For investors, a call loan means bank loans to stockbrokers for the purpose of carrying customer margin borrowing, using securities as collateral. The rate of interest, similar to that on other high-quality short-term loans, varies over time.

Brokerage firms usually charge customers the rate on call loans plus an additional 1% or so depending on the amount borrowed. Also called broker call loan. See also broker's loan.

 

[Bill Mattocks]

I hope she does not lose her home.

 

[Twin Fist]

this cant be legal

 

[seasoned]

I'm sure, even if it is a call loan, there will be some kind of help out there for her.

 

[Bill Mattocks]

If you watch the video, it's not a call loan.

She has a home loan. Her home loan is current. Her bank is not foreclosing.

However, the person who owned the house before her - actually two owners ago - apparently sold the house and their bank was still owed money. THEY are the ones foreclosing. They're foreclosing on their security in the note to the owner they gave a mortgage to - the house. It doesn't matter who owns it now, they still 'own' their own interest in it.

This is why people buy title insurance. When you buy a house, you buy title insurance. The title company stands between you and any previous claims on the property - usually only after a title search is done. So the title company should pay the original claim off - that's what title insurance is for.

But the title insurance company is clamming up and refusing to talk to the homeowner (their client) or CNN. They're telling their client (the lady in the video who owns the home now) to get a lawyer.

She will have to get a lawyer and sue her own title insurance company. According to my wife (who does this sort of work for a major bank), she will win, but it will cost her money for the attorney - hopefully she will get it back from the title company in court. She says that if the situation is as it appears to be, the court is going to rip the title company to shreds, because they're in clear violation of their contract with the homeowner. They're supposed to step into the gap and pay off the bank that is attempting to foreclose - that's what title insurance is for.

In any case, I would not want to be her. Ugly is not the word for it.

And no, it's not illegal. This is all tort law. If she doesn't get it resolved, she'll lose her home.

If you buy a home, buy title insurance and if they don't insist on a title search, get one done anyway. And apparently, do some research on your title insurance company as well - who knew that some of them were such crooks?

 

[howard]

Bill,

I think your explanation is right on the mark, with the small exception of this one point.

This is all tort law.

Actually, it's contract law. Tort law generally deals with wrongs that do not involve privity of contract between the plaintiff and defendant, like negligence.

Specifically, this case involves a security interest in the house held by the lender who brought the foreclosure action.

 

[celtic_crippler]

But..but...but...Obama said I didn't have to lose my house!!!

There's hardly ever anybody looking out for the people is there?

 

[Bruno@MT]

However, the person who owned the house before her - actually two owners ago - apparently sold the house and their bank was still owed money. THEY are the ones foreclosing. They're foreclosing on their security in the note to the owner they gave a mortgage to - the house. It doesn't matter who owns it now, they still 'own' their own interest in it.

That would not be possible here. Passing a deed from one person to another is always done via a notary. This is required by law. He settles the score with the sellers, and makes sure that the deed is 'free' and only covered by the new mortgage (and any other applicable laws and regulations, if any).

 

[Bill Mattocks]

That would not be possible here. Passing a deed from one person to another is always done via a notary. This is required by law. He settles the score with the sellers, and makes sure that the deed is 'free' and only covered by the new mortgage (and any other applicable laws and regulations, if any).

I'm sorry, that's not right. Trust me, my wife works with these issues all day long - they have an entire department devoted to these kinds of problems.

All a notary does is ensure that the people signing the document are who they say they are. They are backing the signatures - not the contents of the document. In fact, they don't usually even know what the document says, nor do they care.

Houses get sold with entanglements all the time. Liens and other encumbrances on the property, some that were filed with the county and some which were not but show up later. If a lender or lienholder pops up with a legitimate claim to the property, they will settle it with the property - the current owner is boned. That's why title insurance exists.

A title search is supposed to be done when a house is sold - law in most places. However, encumbrances do not always show up, some pop up years later, or even when the house is sold many years later. Title insurance is supposed to back the homeowner to protect them from exactly this kind of situation, and that's why people buy it.

In this case, it appears the title insurance company is refusing to pay - and that's the problem.

 

[Bruno@MT]

I'm sorry, that's not right. Trust me, my wife works with these issues all day long - they have an entire department devoted to these kinds of problems.

All a notary does is ensure that the people signing the document are who they say they are. They are backing the signatures - not the contents of the document. In fact, they don't usually even know what the document says, nor do they care.

Houses get sold with entanglements all the time. Liens and other encumbrances on the property, some that were filed with the county and some which were not but show up later. If a lender or lienholder pops up with a legitimate claim to the property, they will settle it with the property - the current owner is boned. That's why title insurance exists.

A title search is supposed to be done when a house is sold - law in most places. However, encumbrances do not always show up, some pop up years later, or even when the house is sold many years later. Title insurance is supposed to back the homeowner to protect them from exactly this kind of situation, and that's why people buy it.

In this case, it appears the title insurance company is refusing to pay - and that's the problem.

Yes, but not over here.

The notary is the one drawing up the contract. He starts with a boilerplate contract, which is then modified according to the consensus of both parties.
He is the one who has the deeds on file, and and liens or other entanglements are mentioned in the contract that he puts together.
He really has all the zoning, county, and other information attached to the deed. The contract that he puts together is quite fat, and contains -everything- there is to know about the deed, including any monetary issues.

Of course, this comes at a price. Deeds have to change owner via a notary or they are simply not legal. And all the work he has to do has to be paid. And this is expensive. The cost is always a fixed percentage + expenses.
I think it is between 7 and 12 percent, depending on circumstances.

So for a 100K$ sale, he takes 12K + expenses.

 

[Bill Mattocks]

Yes, but not over here.

The notary is the one drawing up the contract. He starts with a boilerplate contract, which is then modified according to the consensus of both parties.
He is the one who has the deeds on file, and and liens or other entanglements are mentioned in the contract that he puts together.
He really has all the zoning, county, and other information attached to the deed. The contract that he puts together is quite fat, and contains -everything- there is to know about the deed, including any monetary issues.

Of course, this comes at a price. Deeds have to change owner via a notary or they are simply not legal. And all the work he has to do has to be paid. And this is expensive. The cost is always a fixed percentage + expenses.
I think it is between 7 and 12 percent, depending on circumstances.

So for a 100K$ sale, he takes 12K + expenses.

Sorry, I guess I don't know where "over here" is for you???

Closings in the USA are done by attorneys. Notaries are simply functionaries who witness that the person(s) who sign a document are indeed that person. Typically a law office pays a receptionist to take a notary course and get certified. Notaries 'here' don't draw up contracts.

And in any case, just because a closing is done, and a title search is done, that does not mean there is no claim on the home. That's why we have title insurance.

 

[howard]

Closings in the USA are done by attorneys. Notaries are simply functionaries who witness that the person(s) who sign a document are indeed that person. Typically a law office pays a receptionist to take a notary course and get certified. Notaries 'here' don't draw up contracts.

And in any case, just because a closing is done, and a title search is done, that does not mean there is no claim on the home. That's why we have title insurance.

Absolutely correct, with the small caveat that in some jurisdictions it may be possible to close on a house purchase without an attorney - you might be able to do it all yourself. Of course, you'd have to be mad.

I know a couple of complete knuckleheads who are notary publics. As Bill says, the only thing they do is witness signatures and confirm the identity of the signatories.

Bruno@MT... where exactly is "over here"? Do you live somewhere other than the United States?

 

[Bruno@MT]

Sorry, I guess I don't know where "over here" is for you???

Oops... Sorry...
I thought I had my 'Location' display enabled.
I live in Belgium. Apologies.