All Forum Posts by: Tom Gimer

@Sharvil Patel

1 is incorrect because of 3.

5 is prohibited in many jurisdictions or at a minimum causes insurability issues on future transfers.

@Karl Arnold Nobody can help with the due on sale clause regardless of how familiar they are with it. If the loan is called the buyer just needs to have a contingency plan in place.

Any investor-friendly title company will know how to close a subject-to transaction. And the docs and agreements should shield the title company from liability... but that doesn't prevent being made a party to a lawsuit. 

And that logically leads everything back to consideration of the strength of the buyer and their contingency plan.

Well the money is long gone at this point so hopefully the buyer purchased an owners title insurance policy... if so the buyer needs to be notified of the fraud and the title claim needs to be made. At least that way the buyer can be made whole and the property can be returned to its rightful owner. 

But that won't be the end of it. It will be interesting to hear who is ultimately responsible. Most insurers have published guidance on vacant land sales which include USPS mailing to the seller's address of record to obtain confirmation that the land is in fact being sold. Perhaps there is a listing broker involved who would have some duty to investigate and if that was lacking perhaps he/she shares in liability. Some title insurers also recommend having the seller sign via RON which includes additional identity verification beyond producing an ID. If the title company did not take these steps or even worse allowed the proceeds to be assigned and/or wired to a different account, their E&O carrier could be the party that ultimately bears the loss.

Seems relevant: https://realestate.alexcooper.com/auction-property/1-7QWCAS/...

Foreclosure sale today. We'll see what happens in a few minutes. Assessed value $125mm.

Is subject-to “mortgage fraud”? No, that term has its own widely accepted definition.

But could subject-to be considered or part of a “fraud in the inducement” action? I would say absolutely, but what occurs after closing is crucial to that analysis.

No brainer here…Remote online notarization. I assume you have a lender so check with the lender if their docs can be executed/authenticated using this process as well as whether the recorder of deeds accepts those instruments. Most began accepting from COVID forward, initially under emergency legislation.

There are many different online platforms, only some of which are accepted by all major title underwriters. Notarize.com I believe is universally accepted. But again the clerk/recorder needs to accept them.

RON is now considered safer than in-person notarization due to the identity verification process and the permanent electronic record. 

There are 2 different contracts involved... the A-->B original purchase agreement and the B-->C assignment. If both of those agreements require earnest money then those obligations are distinct.

Absent a full release of B by A, any title company releasing B's EMD when C's EMD is made doesn't understand basic contract law.

In the standard assignment scenario (especially with less than perfectly-drafted agreements) it is entirely possible for C to justifiably fail to close and for B to default. And when that happens if there is no deposit for A to forfeit that is a problem.

The problem is trying to get title insurance in this scenario.

The lender's successor needs to be found and a payoff or release needs to be obtained OR a quiet title action needs to be pursued. There are companies such as reQuire that handle "title curative" matters like this for a fee.

A $40k open lien that has not been being paid down could easily have a current balance of twice that amount... so the escrow would be insufficient. Some creditors buy liens like this for pennies on the dollar and reappear before the lien expires just to foreclose and yes it creates a giant mess.

Following for a good laugh...

@Kayla Holder Whether you are currently dealing with 100% of the ownership interests depends upon how the siblings held title. You need to pull the current deed and determine if they held as tenants in common or joint tenants with the right of survivorship.

Also the use of quitclaim deeds very much depends on the location of the property. In some places they are used solely for family transfers and curative or corrective actions. In others, quitclaim deeds are the norm.