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Possible pre-existing loans found on preliminary title report need to resolve

Discussion in 'Liens & Encumbrances' started by Purehobby, Apr 20, 2021.

  1. Purehobby

    Purehobby Law Topic Starter New Member

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    Jurisdiction:
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    I am looking for help with a low value land I purchased from someone who purchased land in tax lien sale. In doing Preliminary title report title company found 2 possible old loans on the property and come to find out they do not even do title insurance on tax lien properties. Value of land is about 15k not huge. I spoke to person I bought it from and he says land is free and clear however I now need to prove that and resolve the questions in my buyers mind about there being 2 possible loans on property. Not sure exactly what I need to do. Lender seems to be out of business and I cannot really understand the preliminary report to know what I need to do.
     

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  2. Zigner

    Zigner Well-Known Member

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    The folks at your escrow company may have some advice, and the lender (for the buyer) may have specific requests about this matter. Furthermore, you may want to speak to a real estate attorney.

    (I had a similar situation on a refinance for my home during which it was discovered that the proper paperwork was never filed in the '60's to release a mortgage lien at the time.)
     
  3. adjusterjack

    adjusterjack Super Moderator

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    Did you not do a title search before you committed to buying the property?
     
  4. flyingron

    flyingron Well-Known Member

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    Yep, and if he'd bought title insurance at that point, he'd not be having to chase this himself now.
     
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  5. adjusterjack

    adjusterjack Super Moderator

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    Might have to sue for quiet title.
     
  6. Purehobby

    Purehobby Law Topic Starter New Member

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    No title search was done or I wouldnt be in this situation. Lesson learned on this one. I have went ahead and contacted a few lawyers thanks
     
  7. adjusterjack

    adjusterjack Super Moderator

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    How much are the loan balances?
     
  8. Purehobby

    Purehobby Law Topic Starter New Member

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    1 shows 23k in 1990 and another shows 14k in 2006
     
  9. flyingron

    flyingron Well-Known Member

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    When was the tax sale? Generally, security interests other than other taxes and government encumbrances are extinguished by the tax sale.
     
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  10. Purehobby

    Purehobby Law Topic Starter New Member

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    It looks like 09 and 2020 and I have a feeling if someone in the field was to read the preliminary report they could understand the wording better then I. I know for a fact the lady that was doing the escrow has no idea what she was talking about but she was hired through my buyer
     
  11. zddoodah

    zddoodah Well-Known Member

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    So...you've already bought the property? Why have you now obtained a title report? Also, what does "possible old loans" mean?

    When did this conversation occur? Before or after you bought the property?

    The way to prove whether a property is or isn't encumbered is by obtaining a title report.

    Seems to be?

    Then you should confer with a local real estate attorney or at least a realtor.

    Are these deeds of trust? If so, you can probably deal with this by obtaining surety bonds.
     
  12. Purehobby

    Purehobby Law Topic Starter New Member

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    I bought a few properties from the person at once. No I did not do a title report as I have bought several pieces without a problem before from him. Im selling one of them off and my buyer has requested escrow and that is where the problem was found and now I would like to resolve it but am unsure on how to do so. DNB shows lender has went out of business. Grant deeds
     
  13. zddoodah

    zddoodah Well-Known Member

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    Instead of deeds of trust? If so, then I'm even more confused about your statement that the "title company found 2 possible old loans on the property." A grant deed represents a change of ownership, not a loan or "possible loan."

    You're definitely going to need to have an attorney review this.
     
  14. adjusterjack

    adjusterjack Super Moderator

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    Are you going to, or have you, hired one.

    What you uploaded wasn't a title report.

    It doesn't appear that you know anything "for a fact." All the escrow lady has to know and convey to your buyer is that there are to liens on the property. The sale stops until you resolve them.

    Hire one of those lawyers you talked to.
     
  15. army judge

    army judge Super Moderator

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    If you ever consider purchasing real estate in the future, retain a real estate attorney to represent YOUR interests.

    The seller is interested in ONE thing, and ONE thing ONLY, obtaining YOUR money.

    You trust you to protect YOUR interest, no one else, only YOU!!!

    The seller's agents/employees/attorney represents the SELLER.
    Those individuals are receiving a percentage of YOUR money passed to them by the seller.

    It is YOUR attorney (who'll also get paid by you) whose function is to protect your A$$ets.

    Its too late to be of value to you today, but there'll be a tomorrow.
    Make sure your attorney is assisting you and protecting your pockets from being picked.

    Never trust the seller, the seller's representations, or representatives; VERIFY everything yourself or through your attorney!
     
  16. welkin

    welkin Active Member

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    That is true. It is up to the county to get the liens removed before issuing the tax deed. This was obviously not done.

    Now you have to get a copy of the tax deed from your seller or the county to see if the loan liens were extinguished but not recorded.
     
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