BiggerPockets

1 yr ago. A husband and wife's house was foreclosed on.
1 yr ago. Husband signed foreclosure deed.
Last week I signed a P&S on the REO, will close in < 21 days.
Today I saw a quit claim deed from last week where the wife sold the property to a person for $250.
I notified the banks Realtor and am waiting to hear back on what they are going to do.
The mortgage was about $140k
Anyone seen anything like this? I'm wondering how long this will be tied up now, or if it will even go through.

Thanks.

I wonder how did you find about it? Did the title company notified you? I agree with Roger. You cannot QC something you have no entitlement to, Even if she signed the QC before the foreclosure, The person whom she QC to, has lost it to the bank since the bank hold the note.

Pretty much. Quit Claim, is exactly what it means. A person can quit his or her claim (Interest) in any said property if he /she had one. Now, if their interest is null and void by the bank based on the governing laws of foreclosure then the quit claim means nothing. That's why most sales are done with Warranty deeds rather then quit claims.

Don't expect to hear anything from your agent or the listing broker (or the seller, for that matter)...

This is likely in the title company's hands right now, and their job is to ensure that the title is unencumbered by the time it gets to you.

In my experience, this could take anywhere from a couple days to a couple months, and in some cases, the seller will pull the deal and send the property to Fannie Mae to resolve the issue (in which case, you'll get your earnest money back, and the deal is canceled).

I current have one property under contract that's been with the title company for over 3 months (it's a great deal, so I'm in no hurry). But, there's no guarantee it will ever close with me.

Originally posted by jawsette

Worst case scenerio is since the wife never signed the foreclosure papers the bank did not have the rights to sell the property.

Yeah, if that's the case, they'll have to re-execute the foreclosure deed, and start all over...

Not fun!