Lis Pendens from nowhere

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Lis Pendens from nowhere

Lubasha White
Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes

Please anyone with experience of buying foreclosures could you help with advice in this situation?

I bought SFH in March at foreclosure auction and got certificate of title on this property. Several days ago I started to receive offers from attorneys to defend it from foreclosure. Checked in public records and indeed, found that in April someone filed Lis Pendens against of my property. From further research I figured out this record refers to mortgage done in 1993 by lender different from one that foreclosed on this house. However, that lender is not in the picture of threatening me to foreclose on my property but successor (?) who just bought the paper from him.

My question is: does second mortgage wiped out by first in foreclosure auction sale, or it has ground in court for whatever reason?

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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y

@Lubasha WhiteTalk to an attorney/title co.  You need to first determine if the new lender foreclosing is junior to the one where you bought the property.  If so you're pretty good.  Secondly, see if this other lender was named/served as defendant in the original foreclosure.  If so, done deal and the current foreclosing lender will have to dismiss.  They may not know they were foreclosed out, if they bought the note without doing good homework.  If this lender is junior, but was Not named as a defendant, not the end of the world.  An attorney can reopen the foreclosure and haven them foreclosed out without having to start the whole process over.

BUT.....since you say the currently foreclosing lender is from a 1993 mortgage, I'm guessing it is Not a second mortgage, not as to recording timelines anyway.  But maybe there was a subordination done at the time the mortgage which was foreclosed on, was originated.  Check the mortgage document online which caused the foreclosure auction you bought from, looking for a subordination from the lender now foreclosing.

@Lew Payne I'd be surprised if that holds up here, without a mortgage, since a Note gives you no security in the real estate, or the right to foreclose.  Getting a judgment would create a lien, but prior to that, I don't think so.

@Jay Hinrichs Judicial proceedings only here, no Notice Of Default option, that I know of.  LP with the accompanying complaint to foreclose (law suit).

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y

    @Lubasha White

    Just because the loan is from 1993 doesn't mean that nobody has been attempting to collect on it or even that it's been in default for long. I'd like to see the property address so I can see exactly what's going on. Here's a scenario of something that could have happened..... the original 1st from 1993 is still active as the senior lien and the owner took out a HELOC in 2007 and ran that up and that's the loan that was foreclosed on when you bought it at auction. Send me the address and I'll see what I can dig up.

    1Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Lubasha White:

    K. Marie Poe

    Original holder of the mortgage 1993 is FIRST UNION NATL BANK. It is not named in Judgment with Branch Banking that foreclosed on property in March 2015. Instead it says that defendants are former owners and individual defendants… weather said unknown parties may claim an interest as spouse, heirs, devisees, grantees, or other claimants…

    Attorney #3 suggested that mortgage 1993 was sold to Bayview after the property was foreclosed in March 2015 and I bought it.

    As I mentioned before, mortgage 1993 was for 40k and Bayview claims 24k. In order to keep the property, which is a must for me, I would rather take a lesser loss and pay this note, then get wiped out from this project. I simply would not be able to recover from loss of the whole property, it’s like matter of life and death for me.

    Attorney #3 states that Bayview might be not interested to accept my payoff their note and still proceed to foreclose on me against of my will, since I am not former owner but 3rd party. Could you confirm or object it please?

     OK let's take it down a notch.  It is not a matter of life and death.  I repeat this is not a matter of life or death situation.  Get a grip woman.

    It makes sense to me that the lender is owed $24K on a $40K loan made that long ago.  It's totally possible the borrowers were making timely (tiny) payments until they died and/or went to nursing homes.  It's possible this loan is in first position.  There were lots of crazy refi situations in 2007 and thereabouts. It's entirely possible the borrowers got a big refi when there was a still a small loan outstanding, one that did NOT subordinate. There was money and loans flying everywhere during the Bubble. The borrowers had equity and took it out.......like lots of seniors.  

    As for Bayview not accepting your payoff, that's a matter of state law/code.  You are a successor in interest, having (possibly) bought a property subject to a senior lien.  You have rights to reinstate or payoff, but there is a time frame in which that has to happen.  Maybe @Wayne Brooks or @Dion DePaoli can address that.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:

    @Lubasha White

    Just because the loan is from 1993 doesn't mean that nobody has been attempting to collect on it or even that it's been in default for long. I'd like to see the property address so I can see exactly what's going on. Here's a scenario of something that could have happened..... the original 1st from 1993 is still active as the senior lien and the owner took out a HELOC in 2007 and ran that up and that's the loan that was foreclosed on when you bought it at auction. Send me the address and I'll see what I can dig up.

    Great likely scenario. First Union became Wachovia that become Wells in 2008.  My experience is with Wells is that they don't mess up.  Unlike many lenders who acquired bad paper.  They have a paper trail, they do the proper noticing, they are relatively timely.  If I had to bet money, I'm guessing that note is totally legit, in senior position and foreclosable.

    So the real question is (for me) where is the title company on this?

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    @Account Closed Don't know.  I've never had to force a py off disclosure, with some authorization.  I'm sure there's some mechanism that a title co. may be familiar with.  Of course, we're all just guessing in the dark here since we can't look at the property history.  I'm Bayview knows what they're doing though.  Also makes sense they weren't named in the prior foreclosure, as first mtg holders aren't required to be named/notified, since their interest remains.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Account Closed:

    Great likely scenario. First Union became Wachovia that become Wells in 2008.  My experience is with Wells is that they don't mess up.  Unlike many lenders who acquired bad paper.  They have a paper trail, they do the proper noticing, they are relatively timely.  If I had to bet money, I'm guessing that note is totally legit, in senior position and foreclosable.

    So the real question is (for me) where is the title company on this?

    This was a "courthouse steps" foreclosure auction purchase.  There is no title company and no title insurance, it's buyer beware and do your homework before you bid. 

    She just sent me the address.  

    The foreclosure case she purchased this property was definitely a HELOC and not a refi. The previous owner owned the property since 1977 and there are 10 total recorded mortgages, give me a bit to pick through the assignments and satisfactions and I'll see what's still active but I'm guessing this is a legitimate foreclosure by the true 1st lien holder. The HELOC was for a max of $141k and this was a far smaller loan so I'm guessing this one probably stayed current (because the payment was low) up until the point the owner knew it was going to be lost to foreclosure by the HELOC.

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Marie,

    I am very happy to hear your encouragement.  Do you think that I need attorney just to make that payment to Bayview if this is my only option? I wish to stop bleeding as soon as possible and saving a few thousands might mean a world for me.

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Wayne Brooks:

    @Account Closed Don't know.  I've never had to force a py off disclosure, with some authorization.  I'm sure there's some mechanism that a title co. may be familiar with.  Of course, we're all just guessing in the dark here since we can't look at the property history.  I'm Bayview knows what they're doing though.  Also makes sense they weren't named in the prior foreclosure, as first mtg holders aren't required to be named/notified, since their interest remains.

    For sure there is a procedure in the FL code to get and tender a payoff amount when buying subject to senior liens at foreclosure sale. But what is it?  What's the procedure for making the demand?  What are the time frames?

    Don't make me come down there and buy a crappy condo at sheriff's sale to find out. 

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y
    Originally posted by @Patrick L.:
    Originally posted by @Account Closed:

    Great likely scenario. First Union became Wachovia that become Wells in 2008.  My experience is with Wells is that they don't mess up.  Unlike many lenders who acquired bad paper.  They have a paper trail, they do the proper noticing, they are relatively timely.  If I had to bet money, I'm guessing that note is totally legit, in senior position and foreclosable.

    So the real question is (for me) where is the title company on this?

    This was a "courthouse steps" foreclosure auction purchase.  There is no title company and no title insurance, it's buyer beware and do your homework before you bid. 

    She just sent me the address.  

    The foreclosure case she purchased this property was definitely a HELOC and not a refi. The previous owner owned the property since 1977 and there are 10 total recorded mortgages, give me a bit to pick through the assignments and satisfactions and I'll see what's still active but I'm guessing this is a legitimate foreclosure by the true 1st lien holder. The HELOC was for a max of $141k and this was a far smaller loan so I'm guessing this one probably stayed current (because the payment was low) up until the point the owner knew it was going to be lost to foreclosure by the HELOC.

    Thanks for the additional info Patrick.  Why does Lubasha say she purchased a "certificate of title"?  What is that?

    It's buyer beware, of course, but why did she not know there was a senior lien?

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y

    @Lubasha White

    Ok so I picked through the chain of mortgages and there are 8 that were satisfied and 2 outstanding. The senior lien is the one issued by First Union 1993. The only other one left was the 2007 HELOC that you purchased. There's a recorded assignment from May 2014 on the senior lien to Bayview Loan Servicing so that would be the first clue that the mortgage in question was still around. My opinion (I'm not an attorney) is that the foreclosure case that was recently filed is legitimate. I would immediately retain an attorney to file an answer to prevent yourself from being defaulted in the case.

    If the payoff on the 1st is $24k I'd pay it off because the property is worth more than that.   Just ball parking the numbers based on what you paid plus paying off that $24k I'd expect you would probably still be able to break even on the property so I wouldn't call this life or death.  

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    @Account Closed When one buys at a mortgage/HOA auction here, the Clerk Of Court issues/records a Certificate Of Title, as opposed to a "deed". OP just phrased it wrong.

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Account Closed:

    Thanks for the additional info Patrick.  Why does Lubasha say she purchased a "certificate of title"?  What is that?

    It's buyer beware, of course, but why did she not know there was a senior lien?

    In Florida when a property is sold through a foreclosure auction the deed is conveyed as a "certificate of title." The auctions are all online and it's just a list of properties and associated cases that are being auctioned, it's up to the buyer do do their own due diligence and know what they're bidding on. The auction isn't going to say what the lien position was, it's just an address and you can start bidding away if you so choose. You could be buying a 1st, 2nd, 3rd, HOA, etc. If you don't research the title before bidding you can end up buying something worthless. Here's another local thread where a bidder ended up buying the 2nd without knowing it.  If you have the cash there's nobody to stop you from making mistakes, you can pay any amount of any item.  

     Here's an example of the bidding process:

    https://www.pinellas.realforeclose.com/index.cfm?zaction=AUCTION&Zmethod=PREVIEW&AUCTIONDATE=04/27/2015

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Marie,

    This is a standard procedure in FL, when you buy property at foreclosure auction in 10 business days you receive from court the paper called Certificate of Title. It says "The undersigned Clerk of the Court certifies that the executed and filed a Certificate of Sale in this auction (date) for the property described herein and that no objections to the sale have been filed within the time allowed for filing objections."

    I wonder, if the words "no objections to the sale have been filed within the time allowed for filing objections" mean anything for sold property?

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  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    11y

    @Wayne Brooks and @Patrick L.  Thanks for explanation.  I assumed certificate of title had something to do with special sheriff's sale title policies,

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  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y

    So getting all these updates.  I read some of the thread trying to garner the issue at hand.

    1.  OP bought an interest in subject property at auction.  That interest is granted in Florida by way of Certificate of Title.  OP is the current property owner.

    2.  The OP is not in "default".  Wrong use of word.  A Borrower, which OP is not, is who can be in default or the loan can be deemed in default.  OP does not have a loan nor granted a mortgage interest in subject property.

    3.  Lis Pendis is a Constructive Notice and is a part of the foreclosure process.  Notice of Default is also a step in the process but is only for the Borrower.  Niether is a substitute for the other as they are different things.

    4.  OP as property owner has a right of redemption up to foreclosure auction.  There is zero fire drill here.  There is NO default time.  There is no other window of time that matters.

    5.  Bayview is a national servicer and is pretty good at what they do.  I am more inclined to think a piece of the story is missing with thier mortgage.  

    6.  OP should contact the attorney listed on the LP and give them her contact information.  Ask for them to send Service of Process or just send over the complaint and notice.  This is fine until OP gets an attorney.  This clears up speclation on who and what the mortgage is and gives insight into the nature of the default alledged by the complaint.  This can then be taken to a compitent attorney for review and engagement.  

    7.  In that defense OP will answer the complaint with requests of items that are relevant to defenses that can and should be raised.  

    8.  As it seems right now, OP bought an interest in subject property which is subordinate to Bayview's mortgage.  OP stands to be foreclosed out of the property but has a right to redeem by paying what is due.  Do not take an approach that this is some misunderstanding and can be resolved by the OP.  

    I will buzz by here tomorrow and see if I want to add more comments.  

    2Reply
  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Please, would my certified letter to Bayview with request of info about filed LP prevent them to file default on me? I sent it last week and it seems I have only 2 days left before deadline. I don't mind to pay but technically how it works?  

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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    11y

    @Lubasha White You've still not answered the question as to whether you were named as a defendant, and served.  I will assume yes.  As for your answer to the suit, no, a letter to Bayview does no good.  You have to file an answer, in the proper form, with the courts handling this case.  If the mortgage is legit, you'll have no defense, and will be foreclosed out.  You'll need to arrange pay off.  Reaching then plaintiff attorneys will be a good place to start.

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  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y
    Originally posted by @Lubasha White:

    Please, would my certified letter to Bayview with request of info about filed LP prevent them to file default on me? I sent it last week and it seems I have only 2 days left before deadline. I don't mind to pay but technically how it works?  

     No.  As I stated, contact the attorney who filed the LP.  There is no deadline that matters beside the foreclosure auction.  

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  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y

    @wayne

    I assume she has not been servred.  So any progress resets upon proof of CT for lack of naming her.  

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Wayne Brooks:

    @Lubasha White You've still not answered the question as to whether you were named as a defendant, and served.  I will assume yes.  As for your answer to the suit, no, a letter to Bayview does no good.  You have to file an answer, in the proper form, with the courts handling this case.  If the mortgage is legit, you'll have no defense, and will be foreclosed out.  You'll need to arrange pay off.  Reaching then plaintiff attorneys will be a good place to start.

    She (well the LLC the property is held in) is named in the foreclosure. The case was filed and summons were issued on 4/10/15. The docket hasn't been updated to show service yet. The address listed for her on the case is the registered agent on her LLC, Spiegel & Utrera, P.A. in Miami, which appears to be a law firm that sets up LLCS, corporations, etc. It's possible the LLC has been served at that address.

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  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Oh guys, you are great! I am so amazed with your knowledge!

    Knowledge is the only thing that works but another only thing it is so hard to find.  Yes I will look attorneys for plaintiff, just checked the LP file and see their names and number! What is surprising, I probably saw the area code of that # in my incoming calls, but ignored it like someone who dialed wrong number!

    Will call first thing when working hours begin in the morning!

    Have a very good night everyone!

    0Reply
  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Wayne,

    "You've still not answered the question as to whether you were named as a defendant, and served."

    I tried to answer but probably was confused with terms. I was named as a defendant after former owners in LP filed in April 2015. But I was not served, I guess due to my confusion. That's why I requested info from Bayview on this file.  

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  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Lubasha White:

    Oh guys, you are great! I am so amazed with your knowledge!

    Knowledge is the only thing that works but another only thing it is so hard to find.  Yes I will look attorneys for plaintiff, just checked the LP file and see their names and number! What is surprising, I probably saw the area code of that # in my incoming calls, but ignored it like someone who dialed wrong number!

    Will call first thing when working hours begin in the morning!

    Have a very good night everyone!

     It's a small, 2 attorney, firm (Straus & Eisler P.A.  strauseisler.com) handling the case for the Plaintiff.  The case will move a lot more swiftly than one of the large foreclosure firms in FL but it should be far easier to get a hold of someone and get this straightened out if you intend to pay it off in full (which will be principal, unpiad interest, late fees, attorneys fees, court costs, lender paid taxes/insurance/property preservation, etc)

    1Reply
  • Patrick L.
    Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
    11y
    Originally posted by @Lubasha White:

    Wayne,

    "You've still not answered the question as to whether you were named as a defendant, and served."

    I tried to answer but probably was confused with terms. I was named as a defendant after former owners in LP filed in April 2015. But I was not served, I guess due to my confusion. That's why I requested info from Bayview on this file.  

    Do you get things forwarded to you that go to the registered agent on your LLC? I see all of the mailing addresses on there and the property appraiser are in St Pete but the registered agent is in Miami. That's where this case will be served so you might wan to contact that agent tomorrow as well and see if a summons has showed up there for you.

    1Reply
  • Dion DePaoliPro Member
    Real Estate Broker · Northwest Indiana, IN · Member since 2011 · 2k+ posts · 2k+ votes
    11y

    (I got sucked in and opened up my computer instead of responses from my phone)

    Lubasha,

    You were served as Patrick stated via your LLC's Registered Agent. They will not attempt to call you. That doesn't happen. There is nothing to talk about. If you did not receive the Service of Process, you should take that up with your Registered Agent. To that matter, since your RA likely has the documents, there is likely not much the Plaintiff's attorney is going to do with you. As far as they are concerned, you do not exist. You would have to prove that you are Member of the LLC before they release information to you. I imagine the path with the least resistance is just get a hold of your RA and get the documents they sent. Otherwise, you probably will have to send over your Articles of Incorporation for your LLC to the Plaintiff attorney to prove who you are and that you have an interest in this property and case. As far as the court and the plantiff attorney is concerned, the entity by law which needed to be served was served and the case can proceed. Whether you personally got to see the documents is your problem, not theirs.

    I also want to stress one last time.  Prepare yourself for the likely outcome that in order to keep this property you will have to pay Bayview off in full.  It is not likely that this is some mistake.  99.9999% that you loose here, not to be a jerk but rather to be really clear.

    The ideas presented back in the thread about possible statue of limitations do not stand.  Currently the interpretation is that a loan has a continuing line of default until it's last payment due date and then a five year statue of limitations would apply.  That is being contested in FL supreme court this year, but that contest hearing doesn't not change the common interpretation of each and every due date on a loan stands to be a point of acceleration upon 120 days past due.  

    Further, and perhaps in this case more importantly, even if that idea of the loan being defaulted and the statue of limitations runs out, the Mortgagee has a new complaint with your purchase of the property at auction.  The title transferred and thus triggers Due on Sale.  Maybe even a couple other ideas.  So even if we apply a SOL to this situation, you still stand to loose since you just recently took title to the property which is clearly not five years.  The Mortgagee's failure to act on a previous event does not prevent them from acting on any new one.  Especially if the event is different.  

    At this juncture, you need to understand what is due to Bayveiw, which they will have in the documents that were served.  Is the property worth what you paid plus those sums.  If yes, then pay it.  If not, then chalk this up as a learning experience as it will be a loss.  
      

    1Reply
  • Lubasha White
    OP
    Saint Petersburg, FL · Member since 2013 · 39 posts · 3 votes
    11y

    Dion DePaoli,

    "As far as they are concerned, you do not exist".

    I understand what you mean, but problem is that I do exist and I have my interest in this case. If I would stay uninformed this law would run me over and I disagree that it is nothing wrong with that. More to it, I think it is ugly and not standing even near with democracy we are the people fighting for.

    But I thank you so much for your eyes opening wisdom and will try my best to resolve this issue. As I mentioned before I contacted the office in Miami already and got answer that they will interact only with attorney, not me personally. I have a hard time to understand why I cannot defend my interest on my own and wish to look around if there is a way for me to cut bleeding. 

    Could you please let me know if I have right to defend my interest on my own without having attorney involved? 

    Again, I admire your knowledge and appreciate your help so much. 

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