Got a deed for collateral

7 Replies

There is a house that was sold at a tax sale and I gave the couple a small loan so they could pay the taxes on the house and redeem it back, she claims that she did this but the man who bought it at a tax sale filed a deed in 17th of July and I got them to sign a quit claim deed the 20th of June.

Now the couple will not pay what they owe me and I would like to file the deed and evict them and take the house. Will I be able to file the quit claim deed and get the house or how should I go about getting the house.


@Chip Chronister  unless you get a knowledgeable local to post you need to see an attorney in your area.  Every state has different tax sale laws.  In some when the sale takes place it is final.  Some have redemption periods, some have other laws.  You need someone who knows those laws.  The tax deed may or may not be a big deal.  Usually you pay the local Treasurer your back taxes and they file papers to remove the lien, in some you pay the person who bought at the tax sale.


It sounds like the OP's transaction was 3 days too late.  If a tax investor filed for deed, that makes it sound like redemption period is over and the tax cert or similar instrument foreclosed.  I agree with Jerry, details matter here now.  Often times common talk miss-conveys the proper details.  Where is subject property?

The other structure issue here is you lent money, I don' hear any mention of a Mortgage or Deed of Trust and I suspect the QCD being held in escrow is in lieu of one of those instruments.  That is not proper.  You can't put a QCD (or any similar deed) in escrow.  The general idea there is you can not circumvent foreclosure in any state.  Second, Deeds grant interest upon execution not recording.  When they signed, they conveyed.  (if it was theirs to convey)  

That makes this sound like the OP has some issues.  The debt, hopefully memorialized by a Promissory Note, should be enforceable (I think) however, it is not secured.  There is a chance, that attempting to collect, the borrower's obtain counsel and they make this a complicated mess for you.  To that, you may have grounds where they gave you something (the deed) and they didn't own it.  Thus, you were defrauded.  Would have to look to the conditions and structure of your funding.

The intent of the transaction can work against you now.  Unknowingly you were circumventing foreclosure (deed in escrow tied to debt to be paid).  Perhaps violating RESPA and TILA requirements.  I think you could probably have the part secured interest just squashed and by doing so, you are a unsecured creditor.  The issue will be now collecting from someone who may have just lost their property.  That is pure speculation.  This is bit messy.  You need an attorney.  I would go get one pretty quick as the tax deed investor will likely start their processes soon which my make it difficult for you to find the Borrowers soon.  I do not envy your situation.  If you post more details, perhaps more input can be given, but you certainly need counsel.  This is a mess.  Good luck.

Agreed, sounds like you didn't perfect your security interest in the property, if it was the borrower who devised this loan and escrowed quit claim deed that was worthless, you need to see an attorney and might throw in fraud as to what they led you to believe. AR also has minimum mortgage loan limits to secure a mortgage of 5K, so if you loan wasn't for more than that, you can't secure your loan with RE. You have several issues it sounds like, you need to see a local attorney. :)

A local RE attorney can tell you in about 2 minutes where you stand.  If you want some guidance before then, try roosting with a topic of "need help with Arkansas tax deed laws", if it's in Arkansas, as all states have different laws, procedures and timelines.  You'll need know the timelines of events, and what Exactly was sold.....lien, certificate, deed, etc.

@Dion DePaoli   the only thing I can add is that some states are filing states not issue states.  Wyoming is a race to the courthouse state.  A deed is not effective until filed.  So if you get a deed and hold it, some one who gets a later deed has title if he records first.

@Jerry W. Correct me if I am wrong and I could be posting from my phone on the mobile app just cuz, but the race to record is a race for priority. Not an idea of validity. The deed conveys upon execution, but priority is set by the stamp. Pretty sure that is the same across the board. Two different actions and two different functions, OP has merged them improperly.

@Dion DePaoli   if you record a deed from the same seller the second deed filed has no validity, it is actually void, at least in Wyoming.  Technically you have a valid deed but it is useless against anyone until recorded.  Now if there was a deed from Buyer back to seller then you filed your deed it would become valid hehe but what a mess.

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