Foreclosure With Quit Claim - Who Owns???
I'm new to the foreclosure process, but I have found a pre-foreclosure that I would like to try to and buy. My research has uncovered something strange.
1 1/2 years ago a couple bought the home, but 6 months ago they signed it over to another party using a quit claim deed. Now the mortgage holder is foreclosing on the original couple, but the tax bill is showing the new quit claim party as the owner.
Which party should I be trying to locate and negotiate with? Both? Neither? Should I wait for the auction to clear things up and hope no one else is interested in this beautiful house???
Hi Bdeberry,
This is not necessary strange, it is just another way to pass off your interest. The down side for the origninal homeowners is that even though they gave away their interest in the property (via a Quit-Claim-Deed), the are still the responsible party for the loan.
So even though they gave away their interest, their bank still has a lien on the house, with the right to foreclosure . . . no matter whose name is showing up on title.
If you are wanting to buy the house outright, you will need to find the people who are on title to (who were given the QCD), not the people who are on the loan. (unless they are the same persons)
Best of Success!
BAMZ
P.S. If the previous owners gave a QCD to these people, they may have given one to 10 other investors as well. Make sure that you check the title to verify that, and that if you decide to purchase the property, you want to recieve a Warranty Deed instead!
I was just talking to an experienced Foreclosure Trustee and asked this question:
If I were to buy the property AFTER the NOD (notice of default), but
BEFORE the publishing of the auction details in the local paper, WHOSE name would they publish as the delinquent non-payor? Mine or the current delinquent owner?
He told me the current delinq. owner, and my name (and credit!) would not be published, used or tarnished.
Now of course, if I were to assume (which I won't!), then I'd also be potentially liable for any deficiency, in some states...NOT in WA on a residential loan, as the election of the foreclosure on the DT eliminates the personal liability on the deficiency..
Thanks for the replies, but I'm even more puzzled about this process now...
It appears that the current owner - transfer by DT - has *not* been notified. All publication and process service has been to the original couple that took out the mortgage. The bank is foreclosing against them - not the current owner.
Is it possible that the current owner does not know that they are about to loose their property????
It really does not matter. The original owners said they would pay for the "loan" which gets applied to the property....REGARDLESS of the action they gave the property to another party. The Loan originator can foreclose on the house if you do not pay. The people who signed the loan papers are who are responsible to pay. What are you actually looking for here? Why do you not contact the bank directly?
Hi,
I am new to this too, but from my reading and correct me if I am wrong anyone. The original owner of the house has nothing to do with the house except the mortgagee, which is not rare when someone does a QCD, they usually bring the balance to 0 and continue the paying the current mortgage as if nothing happened. (Check with a your local Real estate lawyer, better safe then sorry.) Also I think the bank can put a lien on the house. And it could be sold at the auction. Not sure what the process would be on evicting the current owners. This one sounds difficult, contact a lawyer and tell him you will do the paper work through him if he help you out. BE SURE TO CONTACT A LAWYER.
i'm getting confused from all the mixed talk but i know whats going on.
it doesnt matter who lives in the house, who owns the house, or who gave the house away to 3000 other co-owners. NONE of it matters because the bank will foreclose on it regardless. whoever is living there wont be living the long and the foreclosure will be on the credit of those people to signed off on the loan (the original owners).
what would i do???
contact the current residence of the home and tell them the great news of them losing their home to foreclosure. then contact the original owners to let them know that they will have a foreclosure on their credit record for a long time preventing them from purchasing anything outstanding unless they do something about it. get a signed AOR (authorization of release) and call upu the bank to say,"hey!!! i need info on this house pronto." fax over your AOR to them. find out how much is owed(payoff balance) and how much it'll take to catch them back up (reinstatment quote), then you can make your offer to the original owner/current owner. (depends if the current owner actually paid a considerable amount, but being that its a QCD i doubt it)
of course remember to do you due diligence and do a title search like bamz said... i think he said that... cause its quite possible that the original owner did quitclaim it to 200 people. and yes look to get a warranty deed from the owner of record.
my thoughts^ phew...thats a doozzy.
[addsig]
All the advice is certainly knowledgable. I must tell you we get an awful lot of this out here in LaLa land, I hope it is the weather but frankly I have my doubts.
Persons in possession, by virtue of a Recorded Quit Claim Deed. Deal with them to buy the property.
Person who was original maker on the Mortgage/Trust Deed. You might assist them in clearing their credit by taking a Quit Claim Deed from them, just to clarify title.
I would like you to bargain with Present Time Owners and buy the property.
I would like you to then clean up prior transactions and protect the credit of the old owners.
I would like you to then bring current the present loan and either lease/option, sell or apothecate the property. Or if you really like it move in.
Go for it, sounds like an interesting deal.
Cheers Lucius
Just remember this simple rule: He who signs the note is always going to be resposible for paying it...and NOTHING he can do, short of cashing that loan out, is going to remove his name or liability on that note.
Amazing but true that probably 75% of all sellers who let somebody else assume that loan, are totally unaware THEY still owe on that note and could be sued if the bank decides to sue on their defaulted note.
And of course, if the seller goes the Subject To route, nobody else is even going to be liable to the bank.
Question......
"Is it possible that the current owner does not know that they are about to loose their property???? "
Yes it is. For a foreclosure to be filed an carried through, the foreclosing attorney must notify every party to the property. They would find this by doing a preliminary title search. One reason the current people who occupy the house would not be served is if they did not record the QCD. If they did record it and did not get served with a notice, they could actually wait until the sale date, object to the sale, which in turn would most likely postpone the sale, and perhaps make the foreclosing attorney start again from scratch!
So is there a possibility that they may not know . ... the answer is yes!
Best of Success!
BAMZ
If there is equity in the property: Contact the person holding the Q/C deed. Tell that party the property is in default and is being foreclosed www.on.Tell that party that you enjoy buying those types of notes and you will pay $100 for the Q/C as a souvenir.
Option A:Bring the loan current and stop foreclosure.
Option B: Any overages above the amount of the lien at the Trustee sale goes to the owner (he who holds the deed) hint. hint.\
If there is no equity:
See information herein regarding short sales.
Option A: reinstate the loan anyway and use property as a lease purchase until equity builds up
There was a duo called Homer & Jethro who use to appear on a TV program called," Hee-Haw". They had a song called, "I'm My Own Grandpa" -that's what this post reminds me of.
Let me take a quick swing at this. The original owners signed a mortgage (TD) & note for a loan which was secured by the real estate. There has been a default.
The lender to protect their investment has exercised their right to foreclose. They foreclose against the breached note. The original owner's signed that note. They are responsible for that debt.
If the default is not cured the house will be sold at the "steps of the courthouse" to satisfy that debt. They are responsible for the debt even though they no longer own the property. Again, you can't negotiate with them because they no longer have any ownership in the property . That's ends one story.
The original owners about 6 months ago conveyed title via a QCD to someone. That someone is now the owner of record (the one you should contact). They own the house which is encumber by the mortgage (now in default). The mortgage has priority over their ownership interest. If the debt & associated foreclosing expenses are satisfied at the auction, they will receive the overbid (;the good news)-but they will lose the house (the bad news).
I didnt read all the posts, but I will comment and hopefully it is not a repeat.
The previous owner gave a deed to someone else. The loan is still in their name. I dont care what kind of deed it is or what state you live in (whether it is judical or non-judicial), this is how it works.
If you are the one giving a mortgage and you were the owner on tilte/deed at the time that the mortgage/TD was given, then that lienholder has every right to foreclose if the mortgagor is in defualt, period. So, it does not matter who is on tilte/deed. All the lienholder needs is a valid TD/mortgage and they have rights. Now, I can transfer my rights if I own the property to anyone I want, using any type of transfer I want (deed, trust or whatever) but that does not keep the lienholder from having their legal rights to the property in defualt on the original loan.
You only need the owner of title/deed to give you rights to the property. It would be a safeguard to get the previous owners to deed you the property, but not something necessary, unless there was a bad recording of deed in the first place, or some question to who was on the deed and a mistake in the chain of title.
Clear??
I recently went through this process, someone calls me with a great oportunity, I can have the house just get it out of their son's name. Well being a broker I first did the research online, BEAUTIFUL, brick , three apts, 3 bedrooms each, In a prime location, Right near the University of Pgh's campus. Rent on a 3 bedroom is $2500.00 amonth with parents signature and credit card secured. I thought I was in heaven. Then I did the property report search, There was a foreclosure by chase on the property 3 owners ago. Needless to say I sold my great deal for $500.00 to someone else. Actually my friend gave my $500.00 to do the paperwork and get the property out of her son's name. I called chase everyday for 25 straight business days, I eventually was wore out. From what I hear the guy that bought it (who was a contractor hired an attorney to get to the bottom of the issues) now has a beautiful peice of property with a substancial income. He told me everthing cost him $29,650.00 and the house is worth over $250,000.00 today. So a deal is only a deal if you can do the footwork to make it work.
[addsig]
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