Curious Title Search Situation

1 Reply

I'm running some title searches for an upcoming Sheriff Sale and came across a situation that has me spooked.

There was a first mortgage from Wells Fargo and then, a few years later, there was a mortgage from IndyMac. Along with the new IndyMac mortgage, a Subordination was filed giving IndyMac the 1st lien position. The thing that has me spooked, though, is that the Subordination is signed by only the homeowners and Wells Fargo -- IndyMac's signature and Notary lines are blank!

IndyMac is the one foreclosing at the upcoming Sheriff Sale, but I noticed in the County records that Wells Fargo also recently filed foreclosure proceedings (although their date of last activity was about 4 months ago).

Should a situation like this be enough to scare me off to another property, or am I being paranoid?

Wells is agreeing to subordinate their loan to the new Indymac loan. The borrower is agreeing to allow the lien priority to be changed on their property. Indymac isn't agreeing to anything, they are just making a loan, and most certainly made it a condition that Indymac subordinates. Since Indymac isn't agreeing to do anything I see no reason for them to be required to sign the subordination agreement. When I've had loans subordinated in the past, my new lender didn't sign, just the subordinating loan.

That said, I can't see the document so I suppose it is possible that it contains some contractual language that is relevant to Indymac (but I doubt it) and that might explain the signature line.

Since I'm not an attorney and cannot give legal advice, I encourage you to get a copy of the document and have an attorney review it. You might also have your title company's chief title officer review it. When buying at a sheriff's sale you are responsible for all debt senior to the foreclosing loan, so this isn't something to take lightly if there is any ambiguity.