What's my liability?

[96Mustang460cid]

What is the name of your state (only U.S. law)? Oklahoma

I'll try to keep this short and factual.

My wife and I closed on a property November 5, 2008. Our financing was a bridge loan with a local bank. We purchased the home from a husband and wife who were present at the closing.

Fast forward to late January, 2009. My wife and I are refinancing with a conventional mortgage. Title work with the refinance shows a problem. Two people (husband and wife) still own an interest in the property. This party is the mother and father of the husband who my wife and I bought the property from (does that make sense?). My current title company contacted this party and requested that they signed off on the property. To date, they are refusing.

I did not purchase personal title insurance.

Although this was a for sale by owner, I retained an Oklahoma Realtor to represent my interests. For this transaction, both parties completed and signed a, "Oklahoma Uniform Contract of Sale of Real Estate."

I have a copy of the bank's Preliminary Title Opinion. This document shows the 'other' owners under the "Stranger Deed" section. The closing company admitted to me that they, "made a mistake..." Both closing companies are attempting to resolve the problem without success.

If it matters, the son works directly under the father in the parents' small business and has daily contact with them.

Questions:
1) What liability does the original closing company have in this situation? To my untrained eye, this should have been caught in November, 2008 and would have never occured if the original closing company had not, 'made a mistake...'

2) Since the original sellers owned the property about four years and, somehow, received help from their parents in this purchase (otherwise, how did they end up on the title?), I believe they should have known of this 'issue' and informed me, my wife, and/or the title company. So, what type of liability do they assume?

[HomeGuru]

Originally Posted by 96Mustang460cid

What is the name of your state (only U.S. law)? Oklahoma

I'll try to keep this short and factual.

My wife and I closed on a property November 5, 2008. Our financing was a bridge loan with a local bank. We purchased the home from a husband and wife who were present at the closing.

Fast forward to late January, 2009. My wife and I are refinancing with a conventional mortgage. Title work with the refinance shows a problem. Two people (husband and wife) still own an interest in the property. This party is the mother and father of the husband who my wife and I bought the property from (does that make sense?). My current title company contacted this party and requested that they signed off on the property. To date, they are refusing.

I did not purchase personal title insurance.

Although this was a for sale by owner, I retained an Oklahoma Realtor to represent my interests. For this transaction, both parties completed and signed a, "Oklahoma Uniform Contract of Sale of Real Estate."

I have a copy of the bank's Preliminary Title Opinion. This document shows the 'other' owners under the "Stranger Deed" section. The closing company admitted to me that they, "made a mistake..." Both closing companies are attempting to resolve the problem without success.

If it matters, the son works directly under the father in the parents' small business and has daily contact with them.

Questions:
1) What liability does the original closing company have in this situation? To my untrained eye, this should have been caught in November, 2008 and would have never occured if the original closing company had not, 'made a mistake...'

2) Since the original sellers owned the property about four years and, somehow, received help from their parents in this purchase (otherwise, how did they end up on the title?), I believe they should have known of this 'issue' and informed me, my wife, and/or the title company. So, what type of liability do they assume?

**A: the title company that did the closing in Nov is liable. Better have an attorney send them a letter.

[96Mustang460cid]

Update:

After three weeks (approximately), my title company received the signed and notarized paperwork. During this time, I lost my lock in rate with the mortgage company. Since the title problem was the only detail that preventing the closing for most of this time, I asked the previous title company to reimburse my actual damages. This included the origination fee to lock in at the same rate as before (no origination fee to get the first lock in @ 5%) and the difference in interest between the two loans (7% vs 5%) for the delay period. I considered the delay period to be any day where the title problem was the only thing preventing the closing on the conventional mortgage.

I spent about nine weeks corresponding with the previous title company while they consulted their attorney. She offered to pay half of my damages. When asked to explain how I (or anybody else) was half responsible, they had no response. Then, I went on to explain what my next steps were: complaint with the state agency(s) and small claims court. At this point, she agreed to pay all of my damages. A check was received the next day.

Have a good day!
Michael

[HomeGuru]

That's good news. Thanks for the update.