i did everything right, they want to sell my home to pay off the sellers debt

[ron estes]

What is the name of your state?kentucky....my wife and i bought a house about two years ago...our hud statement reflects that payment for the sellers two mortgages was sent andwe have title insurance also...the sellers second mortgage was an equity line on the home and the sellers bank continued to keep this line open and allowed him to incur additional debt on this line of credit after we bought and closed the loan on this house...he went bankrupt and the seller has now filed suit in local court to have our home sold by the master commisioner to pay off this debt...who has dropped the ball here...can i sue them for payment of my legal fees to defend my interest in this property? its not so much the money issue but a matter of principle.....we closed at a lawyers office and he says he did everything correct....i have spoken with two other lawyers who have told me it could be two or three people or parties in this transaction who could be at fault,,,i am mad and want to keep my home and recover the lost time and money i have spent to defend my property...i hope the law is fair to innocent parties and that i have legal recourse to this...help?

[tcjnichols]

It sounds like you may have recourse through your Title Insurer. I am not an attorney but have some Title experience in a different state, the way it works here is when a line of credit mortgage or deed of trust is paid off through a sale, the escrow agent should not only ask for a payoff on that lien, but also request that it is closed and either satisfied or reconveyed.

You should probably start by contacting whoever closed this transaction to see if that was done.

[ron estes]

ky....the closing agent says he did everything right and declinrd to put me in touch with his malpractice insurance...my lender claims no knowledge of this but says that someone in their legal dept. will call me...i won`t hold my breath....my cousin who is a bank manager in my town says that someone dropped the ball and didn`t follow thru on a final title opinion....the sellers lender who is the party suing for the sale of my home won`t return my call...my next door neighbor who is a loan officer says yhay they are crazy for thinking someone else will pay for their mistake...this will be interesting to see who the negligent party is....so you think the title insurance will pay for my defense?

[tcjnichols]

If you purchased an owners policy when you purchased a home, see if the sellers lien shows as an exception on your policy. If not, contact the insurer, they should follow up. If that doesn't work contact the state commission that governs the title insurance in your state (it will probably be the real estate commission or insurance commission) and see if they will light a fire under the insurer. If they don't contact your attorney and provide him/her with as much information you can. There is no reason you should lose your home for somebody else's error.

[ron estes]

thanks and i will post as to the result of these actions

[Minnymouth]

ky
TO - Ron Estes
From - Minnymouth in Ky

Regarding your problem with your title. I owned my home for 7 years.
I lost my home in Chapter 7 No asset case due to "lender negligence" by my mortgage company and title company (at closing). Mortgage co. and title co. failed to record title in my name leaving it all in sellers name.
When I filed chapter 7, Trustee took the home as my asset with a clear title to sell.
Lost a $80,000 investment over 7 years. I too paid for "title insurance" at closing.

According to Ky laws, I understand that I have the right to sue the Mortgage Company for "lender negligence" for not perfecting their lien on my title. I also have the right to sue the title company for not recording documents correctly. In turn the morgtage company can sue their title company to recoup their losses.

I did nothing wrong either - but I sure got screwed royally!!

Me, I'm going after "blood" - somebody is going to pay!!!

If you will check on-line under Ky gov. offices you will find a link to Ky Consumer Protection Agency.... you can file a grievance with them and they can help you with information on what to do next.

Now for a little "humor" - my mortgage company will not sue their title company because it is owned and operated by a state senator...... what bank in their right mind would sue a state senator is what the mortgage company told me**************. (political)....

My advice - don't take all this laying down. Find you a good consumer/real estate lawyer and have a serious talk with him. Don't go down without a fight**************.

Minny

[nextwife]

It is the closing agent's responsibility to be certain the lender is not ONLY paid off, but instructed to CLOSE the Line of Credit at the same time. Request a copy of the payoff instruction letter on the LOC from the closing agent. If they instructed the LOC lender to pay off the loan, and they did NOT, it is a mistake on the part of the LOC lender for keeping the loan open. If the closing/disbursing agent did NOT instruct to close the line, then THEY DID make a mistake. Paying off a HELOC is not sufficient. All helocs need to be closed and paid off when there is a sale. Find out who handled the disbursing.

As to the title company being responsible- it depends on the Schedule B1 requirments regarding the LOC. It most likely required the payoff and closure, and satisfaction of the HELOC. If the HELOC was not ordered to be closed, thenm their requirement to insure was not met.

However, it is important tpo know if the payoff letter requested the closure and issuance of a mortgage satisfaction. If it did, the HELOC lender failed to follow the instructions.

[ron estes]

my lawyer sent me my response to the complaint issued by a major bank and it seems i am suing the plaintiff as they are liable to me for "negligently and carelessly "failing to release its mortgage after the closing, as required by law, and "negligently and carelessly" advancing money to the seller under an open end provision of a mortgage conveying property the seller no longer owned. Also,iI have a cross claim against the seller because the deed we both signed was with "general warrenty of title" and he is liable to me for breach of general warrenty of title, including, but not limited to, all amounts expended herein for the defense of this action and indemnification of all damages resulting from this suit.....my attorney further asserts that we should recover from the plaitiff statutory damages, or fines, for failure to release the mortgage, for damages for wrongful assertion of a lien and wrongful foreclosure, including attorneys fees incurred herein....i think that he knows that the closing agent, whos father is also a lawyer and somhow connected to state govt, did as he told me he did...everything right...and i guess that included the proper payoff instruction letter to the plaintiff...when i hear more on this i will post again...i am sorry for your loss of your property