Sucky Homeowner Sells House with Lein

[catcul]

I was inspired to write about the two lawsuits my parents filed. This is the first.

My parents moved here and bought a house from someone I'll call Mr. L. About two months later, a bank called my dad and informed that our new house had a mortgage on it. Mr. L didn't inform my parents about that when he sold them the house. My parents sued Mr. L and won.

Of course, Mr. L decided that he didn't need to pay the judgement. My dad's lawyer decided to have Mr. L's assets frozen. There was a musical act that a promotion company wanted to attract to town to play in the Coliseum. They needed Mr. L to invest some of his money to bring them here. Mr. L found that he couldn't raise enough money. By the time he was able to get his assets unfrozen, it was too late.

[Sapphire Silk]

How were your parents able to get a clean title with a 2nd mortgage on the house when they bought it in the first place? They did have title insurance, yes?

Who paid off the 2nd mortgage? Mr. L or your parents?

[catcul]

I'm not exactly how it happened, but I do know that Mr. L had to reimburse my parents for that hidden mortgage. I do know that they bought it about 35 years ago.

[Heksubah]

How were your parents able to get a clean title with a 2nd mortgage on the house when they bought it in the first place? They did have title insurance, yes?

Yeah, was gonna say. I work in the title insurance industry and usually they'll make sure there are no liens/mortgages/judgments, etc, and if they don't check and something shows up then it is on them to fix the problem.

[taxguykarl]

That was the case when we re-fied a couple years ago. The underwriter found no lien other than his company's (we re-fied through the same bank).

[wolfie]

With this being around 35 years ago, I don't think title insurance existed back then. Still, it should have been standard practice for your parents' lawyer to do a title search. How come this didn't turn up the lien?

[Aethian]

I think it could have been the case of misfiled paperwork since this was before computer filing.

[catcul]

I think it could have been the case of misfiled paperwork since this was before computer filing.

Actually, computer filing had been around for about 15 years at that time. However, I cannot give Mr. L the same benefit of the doubt that all of you are willing to give him. We have found evidence of his shady business practices. My dad found out that the wiring in one of the bathrooms was substandard.

The strongest evidence of him being a con man was the deck. He built a brand new deck with untreated lumber just before selling the house to my parents . The deck rotted apart after 5 years. My dad tore down the old deck after a board gave way when my mother stepped on it. (Thankfully, she was unhurt.) My dad built a new deck with treated lumber. It lasted for 30 years. Mr. L ran a construction company; he should have known better.

In other words, my dad, an amateur, built a deck that had lasted 6 times longer than a deck built Mr. L, a professional.

[EricKei]

Isn't selling Encumbered property a felony? o_O

Of course, having him arrested would probably also prevent you guys from accessing any of his assets if he were to be convicted, so that might be counterproductive.

[protege]

In other words, my dad, an amateur, built a deck that had lasted 6 times longer than a deck built Mr. L, a professional.

It could have simply been a case of the "pro" wanting to get the deck done as quickly as possible to make a sale. If he was selling, he might not even care that it's not done right. After the sale, it's not his problem.

When I moved into my current home, some of the work done by "pros" was horrible. Apparently, the previous owner's son was a "contractor." A contractor, that didn't know you're not supposed to pour concrete during the winter! He 'repaired' my front steps, and of course, they looked like shit. The concrete didn't set correctly--it was so cold, that it froze. When I came home one night, a huge chunk fell out of the side That meant the steps were no longer safe, and had to be replaced.

Rather than pay someone to do it, I got out the fence maul and pry bars, and broke it up by hand. Fun...but a pain in the ass. After the first 2 steps were removed, it was apparent just how crude the steps were. Instead of being solid concrete, there was all sorts of shit in there--old bricks, dirt, bits of metal...and lots of concrete powder! When the steps were poured during the freezing winter, the extreme cold sucked the water out of the middle. Only the outside, and about 6 inches into the concrete was solid!

I have a feeling that when that was done, the guy charged his mom and arm and a leg. Bastard. But, at least I had it all done properly. I had a friend of mine--who is a contractor--take care of it. Wasn't cheap, but I've seen his work, and it's worth it.

[jerrybear]

Here-bouts, not too long ago, and sleazebag property owner was leasing a restaurant property to a national chain franchisee. You'd recognize the name. As more and more people grew computer literate and checked their credit and stuff online the franchisee discovered that the property owner had taken out HUGE loans on all the fixtures. ALL the fixtures. He was making minimum payments on all the loans while he played the pyramid with the capital nut and when backed into a corner proved to be nearly too slippery to catch. Until the franchisee's relatives from NJ and the like showed up. Not to say he had any real knee cap damage, but, he did sweat bullets for a while. The best part was lots of other people got to checking and he was doing it all over two counties!

[Raveni]

Isn't selling Encumbered property a felony? o_O

What? No! It's not the slightest bit illegal. That's why you get a title company and purchase title insurance. A title search will easily reveal many different kinds of liens on the same property, like bank mortgage, HOA dues, code enforcement charges, credit card debt judgments, IRS taxes, etc... Some of those don't even go away when the home is foreclosed on.

I've seen many a new owner who didn't understand "buyer beware" purchase a home for cheap, only to find out that someone else was knocking on the door demanding money.

Of course, if you have a contract that says the liens will be taken care of, then it's simple breech of contract and you go to court to try to get your money back. Easier if you have a title company take care of it so you're protected.