Post-foreclosure "cleansing" Of Title
I’m in the process of buying out a bank’s mortgage on a foreclosed home. The home has “title problems;” apparently a jilted spouse still listed on the deed as an owner cannot be found or won’t agree to helping to sell it. Thus the title was bad going into foreclosure. I’ve been told that if the bank holds it for the required six month redemption period, the title is somehow “cleansed,” making it a marketable property again. Anyone have experience with this? If I buy the title from the bank, will the same title “cleansing” accrue to me, so I can turn around and sell it quickly for a nice profit? Thanks!
Hi loon,
I've never heard of a bank "cleansing" a title. It sounds a bit suspicious to me. What now, title laundering? lol. Anyone else heard of this?
I wouldn't trust the bank that any "title cleansing" would pass to you.
Try to contact the jilted spouse and see if you can get them to quitclaim their interest to you (offer money). If this doesn't work...
Get thee to an attorney and file a suit to quiet title.
Best of luck and let us know what happens
Hi, I used "cleansing" as a metaphor for some legal process of which the the bank avails itself during the 6 month redemption period. Apparently through holding the title through the redemption process, the bank effectively "quiets" the title by giving any claimants plenty of time to come forward or let the property go. I don' t think it's some suspicious process; though it clearly favors the bank, it also allows the bank to get this asset off their books.
Hi loon,
Ok, I couldn't resist the giggle about laundering titles.
Naturally, everything the bank does favors the bank.
The bank may, indeed, have a way of cleaning the title through the redemption period - I've just never heard of it. If you are going to rely on this information you have to make sure that it is not something the bank is telling to to pass their title problems on to you.
You may want to talk to a title abstractor - (found at most Courthouses researching titles) they will know whether or not this type of title cleaning is valid.
When you come across something new, you just have to check everything again and again to make sure you are protected.
Can you find out the name of the legal process the bank uses. I'd be interested to research this further.
Let me know
Thanks
The foreclosure process in it's self should clear up any title issue. The bank makes plenty of "public notices" that are to let anyone with an interest know that the property is being foreclosed, and in less the party with interest steps forward to redeem the property during the foreclosure period the house becomes the banks (kinda like a second mortgage being dropped at the sheriff's sale). This is the way I understand it. MIght want to check your states laws on this process.
Hi loon,
I thought the ex spouse was a title problem that came up after the foreclosure.
I agree with boyd4444 that the foreclosure may wipe the ex spouse off the title.
However, like with a junior lien, in most states the ex spouse will have to have been named and served in the foreclosure in order for their claim to the property to be extinguished. You can find this out by reading the foreclosure file. If the ex spouse was not named and served in the foreclosure suit, then they may still have a claim to the property and a title underwriter may consider them a cloud on the title.
Again, you might also want to check your state's laws.
Let me know how you get on