All Forum Posts by: Clint Votruba

I'm an Illinois real estate attorney and have little knowledge of the real estate laws and customs of North Carolina.

However, Cash is king and you should make sure you are covered/protected before you complete the transaction.

First, yes complete an inspection if you want to and that can take as long as you can to have it completed.

Next, although I may feel ok with giving the Seller's attorney my Earnest Money, I would not do the transaction unless a title company is involved as the escrow agent for the parties, takes/receives my payments, and can guarantee me clear title ownership.

In Illinois, as a Seller's Attorney, I can be ready for a cash closing in about a week, subject to the time it will take to obtain a Plat of Survey, HOA documents, mortgage payoff letter and city inspections, and cleaning up any title exceptions, if any.

Therefore, as a Buyer, you'll want to review the title commitment, survey, HOA documents etc. before you actually close, no matter how much in a hurry you or Seller may be.

Good luck.

I believe in this situation, the title company would not be liable to reimburse you for your loss.

You of course would sue the title company and make an argument that they should have warned you etc.

However, even with warnings in email messages and documents, Buyers will forget or convince themselves that the emails are real and believe that they must act quickly as the email advises.

Many people simply don't believe they are going to be a victim of a scam but it happens everyday.

I once emailed wiring instructions to a Client and told him about the risks of doing so but that he would be ok if he called the title company and confirmed the wiring instructions.  At closing the next day, his wire was late/hadn't hit yet and when I asked him if he'd called the title company before wiring, he said no.

I will never email wiring instructions to a Client ever again.

Many times consumers will not do as they are told/advised even when they have an attorney/Agent warning them of risks.

Now I fax/mail wiring instructions and verbally review them with the Client.

Glad you didn't get hurt here.

Good luck.

I see that you are located in Houston, Texas, which is in the County of Harris.

Assuming the property is located in Harris County, that county's recorder has a website at https://www.cclerk.hctx.net/Applications/WebSearch/RP.aspx  

You have to register to use the database but you can search for recorded documents online, and probably make a copy for a fee.

Good luck.

Rumen Mladenov in Illinois when I work as a Seller's attorney, an important part of my job is title clearance, collecting the required documentation that will cause a title company to either remove an offensive title exception or insure over it.

I've been in your situation and it's very frustrating and I'm frustrated right now and it's not my transaction.

I have several other ideas.

You could contact the SunTrust lien release department in a well worded letter, telling them that you are trying to clear up a lien in a real estate transaction, give them a copy of the recorded lien and give them a copy of the title commitment.  Ask them for assistance in finding out if the lien has been paid off and if so, can they issue a release.  No kidding, I've had some luck here where a lender has agreed to issue a release (fee or no fee) and overnight/fedx the release to me (fee or no fee) and it didn't take a week to receive it.

I don't admit this to many people but the other way is what I call a "shotgun request".  In any request for a Hold Harmless Letter, you would deliver to a previous title company (a) copy of your CURRENT title commitment with the old lien stated in an exception and (b) copy of their (title company you are writing to) PREVIOUS title commitment/policy or Alta/Hud Statement they issued on the same property where they either paid the lien off or they insured over the lien.  If a PREVIOUS title company gave a previous owner or lender clear title on this issue (waived it or insured over it) they will issue a Hold Harmless letter to your CURRENT title company.

In your case, you don't have any title commitment/policy issued by the PREVIOUS title company.

So, what you would do is still make a request for a Hold Harmless Letter, stating they issued title on a PREVIOUS transaction BUT only give them (a) a copy of your CURRENT title commitment with the old lien stated in an exception and (b) of copy of the PREVIOUS recorded lien/mortgage.

Most title company Hold Harmless Departments will still do a search of their records based on the information you have given them.

You might get lucky and have a title company come back and tell you that they were involved in a PREVIOUS transaction with this property, perhaps the 1985 sale etc. OR I've had title companies come back to me with an explanation of how to remove the lien at no cost etc.

It might sound unethical but if the letters are written correctly, the title companies who receive your written request will try to find if they were involved in a previous transaction where they paid off or insured over the unreleased lien. In Delaware, the major title companies are Chicago Title, First American Title, Ticor Title, Fidelity National Title, Republic Title, Stewart Title and, Lawyer's Title.  However, don't expect your current title company to send out 7 letters to 7 different title companies.

Good luck.

I just realized that a lien recorded in 1976 would be almost 43 years old.

Depending on what kind of lien it is, I am wondering why the title company can't consider insuring over the lien based on the age of the lien or possibly allowing you to pay a premium of $ 1,000 for them to take the risk and waive/insure over the lien.

I don't know who you are dealing with at the title company but you should demand that a title company underwriter review the 1976 recorded lien document.

The underwriter may have other ways to deal with/insure over this lien that's 43 years old.

Good luck.

Just several ideas I have and it would help if you could answer several questions too.

First, let me say that I am disappointed that your current title company's resolution to this problem is to hold back an escrow, which in my state is called a Title Indemnity. 

You stated:  "I have a property under contract that has a lien from 1976 that has not been recorded as satisfied." 

Question:   Assuming the current title company told you about the lien, can't the title company give you/find a copy of the 1976 "lien" document?

Question:   Was the lien a mortgage which a title company in the past would have recorded?  Or was it a different kind of lien (probably not recorded by a title company)?

Question:   Assuming your current "brilliant" title company did only a 20 year search, can't the title company search back BEFORE 1976 and obtain a copy of the Deed into title of the person who owned the property when the 1976 lien was recorded?

Why?   I know this is a long shot but in Illinois, the title company recording the deed and mortgage will stamp their name and the policy file number on the deed/mortgage itself before recording.

Question:   Does the "lien" recorded in 1976 have any information on it referencing a title company (mortgage at purchase or refinance?)?

Question:  Could you find information on the deed of the person who took title before the 1976 lien was recorded?

Question:   Can the current title company give you a copy of the 1978 recorded deed?, the 1978 mortgage recorded with the deed? and the 1985 recorded deed and mortgage?   All of which may have some indication of what title company recorded those documents?

If you get lucky and you find the name of the title company that did the 1978 and/or 1985 recordings, it is possible that you can order a "Hold Harmless Letter" that can be used to obtain insurance coverage on this issue from your current title company.    

If you think these may help you, I'll tell you more about how to order a "Hold Harmless Letter" from the previous title companies.

Good luck.

Understand that I am unfamiliar with the way closings are performed in the State of Washington.

However, in Illinois, title companies do not read and follow the contract as it relates to completing the Alta Settlement Statement.  Attorneys here modify the standard contract and never share those amendments with the title company.  Here the title companies deal with title insurance issues and are given closing figures by the Parties.

However, IF the title company does make decisions about what figures should go into the Alta Statement, then they must accept the responsibilities and risks of taking on that role.

OP stated   "...and after closing the title company said they removed the rents for the upcoming month of November (Closed on Nov. 5) at the seller's request." 

Therefore, I believe I correctly assumed that Buyer saw the Alta Statement with the rent/security deposit credits on it and thereafter the title company removed them at Seller's request and without Buyer's permission or knowledge.

Yow!  That is really unacceptable EVEN IF the title company realized that the rent/security deposit credits should not have been placed on the settlement statement in the first place.  

Any subsequent changes must be disclosed to the buyer before the closing, not after.

I'm wondering how the title company got around TRID regulations, assuming this transaction was not exempt from those rules.

Finally, it is possible that this title company was willing to taking directions from the party (Seller and/or Listing Agent) who placed the title order and who may place more title orders in the future. If the title company shows such favoritism, they lose the ability to act as an impartial third party escrow agent.

Please amend my statement above to read in part:

"Today, because I'm not very nice, I'd email the title company DEMANDING a response which includes.."

When you, the Buyer, purchase a house/multi unit property that has tenants, 

YES you want (a) a credit for the security deposits that the Seller collected from the tenants at lease signing and (b) a credit for part of October rents paid, you took title October 15th, you want a credit for the balance of the month.  

YES the Seller calls in those credits to the title company to show on the Alta Statement 

BECAUSE

YES the Buyer will sign the Alta Statement ONLY IF those credits are on the Alta Statement

THEREFORE

NO the damn stupid title company whose job is to act as an IMPARTIAL THIRD PARTY cannot "assume" that you would work it out at a later date.

It's outrageous that they removed the credit, I'd be freaking furious that she "blue me off."

My problem with all this is that the title company has not admitted wrongdoing here and therefore, will probably do it again. Why?  Because you're a layman consumer and frankly, they are not afraid of you.  As an attorney, I could screw them 6 six different ways for acting in this UNETHICAL/MAYBE ILLEGAL MANNER.

In the future?   Oh the Seller said the Earnest Money credit should be lowered to $5K from $10K so we did it. I assumed the Seller told you that they were taking the $ 500 warranty payment off the Seller's side.  I assumed you'd be ok with the closing cost credit being reduced by $ 2K because Seller said it was ok.  Good lord.

I'd wager this title company has done this before and therefore, in the future, add a condition to each Offer to Purchase that you will not buy if the Seller orders title through the XYZ Title Company.

Today, because I'm not very nice, I'd email the title company a response which includes (a) an admission that the title company wrongly removed the credits without your permission and (b) an apology with a guarantee that they will not to it again in the future.

NEVER HAPPENS in Illinois because Buyers are represented by Attorneys and we would never tolerate a title company that takes orders unilaterally from the Sellers.

Once the Buyer has signed the Alta Statement based on the figures attached to that signature, the title company simply cannot remove credits, which require that you to bring in more money to closing, without your permission.

Good luck. 

Revocable Living Trusts do not protect the Grantor/Owners from judgements.  If that were true, every single person in the country would hold their assets in trust.  An irrevocable trust may not be subject to judgements but then the Grantor/Owner has given up control of his assets.

You'll have to give us more information about your situation.

Can I assume the family member you are buying from … 

(a)  Is the Grantor/Trustee of the Trust that is now in title?

(b)  Does the family member, selling the property to you, know anything about the judgements filed on the property?

(c)  Does each judgement/recorded document, name the Trust, currently in title, as the defendant/debtor to the judgement?

FYI...creditors can obtain judgements against revocable living trusts in the same way they can against individuals.  Therefore, you should be able to clear a judgement against a revocable trust in the same way you would where there is a judgement against an individual.

If you can, provide answers to the above referenced questions and then I may be able to give you more direction.

Good luck.