Me and my boyfriend bought a home here in Sacramento just 6 months ago. A couple months after purchasing the home, we received a letter from a real estate investment company stating that a previous owner of our home went into an option agreement with them, therefore giving them claim to our property. This agreement was from 2008 and from 2 owners ago, not even the owner that sold the home to us but the owner who sold the home to the people who we bought the home from. So 2 owners ago, if that makes any sense. This agreement supposedly allowed that owner to take payments from this real estate company, which then in turn allowed them to own a piece of our property. They are claiming that this was recorded as a memorandum of conveyance running with the land. They also gave us a copy of a deed of trust that they recorded.
The first thing we did was reach out to our title insurance. They were in contact with this investment company and as it turns out, according to them, it is a valid claim. They then proceeded to issue a coverage letter stating that they provided us with a copy of this memorandum listed under the exceptions of our title insurance during closing. We went back to our documents and did see this memorandum listed under the exception of our preliminary title search. However, to us, this didn't mean anything. It was listed as a memorandum, not a lien, or a deed of trust. In conclusion, because they listed the memorandum and notified us of this, that supposedly allows them to deny our coverage. Which doesn't make any sense to us, given that sure, they told us there's a memorandum, but they did not tell us there was a lien or deed of trust unsatisfied on our property. As a first time homebuyer, I would think that my title insurance would do more to cover me.
Because of their decision, we then turned to our lender to help us. Since they own most of our property, we figured they'd be concerned that they are no longer first lien holders to our property. We also learned that the lender this owner had (that went into the agreement) was the same lender we have currently. So I made them aware of this. They let us know that they are admitting to the fact that they missed this lien when they approved my loan. They also let us know that they did also miss the lien when that other owner sold the house to the owners before me. So it sounds like it was missed twice. At this point in time, all they have been telling me is that they are doing research. And trying to figure out whether to get their legal department involved. I know that we purchased lender's title insurance when we bought the home so I am hoping that's another avenue they will look into.
Well in the midst of all this, I got another letter from the investment company - demanding that we settle this lien in 2 weeks or else they will use other remedies available to them to settle this lien. I of course started to panic, so I called an attorney. After going over the situation briefly, he stated that the only other person he can think of that we can go after is my realtor and their broker as they should have given me the heads up when this memorandum was brought up. I also learned that they have insurance they can initiate on their end if needed.
I guess I am going on here to ask if anyone has dealt with this type of situation and if so, what was the course of action and outcome? We are just so lost. Reading over the deed of trust, it states that the investment company has to give consent for the house to be sold. It also states that if the house is sold the lien must be satisfied. So we are just so confused about what to do given that the house was not only sold once, but twice and this lien was never satisfied. How can they make us responsible for it when we are not the ones who went into this agreement? We understand that it is a memorandum running with the land, but we did not sign that memorandum or deed of trust. And why is it that were the ones responsible when there were owners to this house before us that were also not the ones who went into this agreement.. but they got away with selling the house to us? I just don't get it..
Should we get an attorney? And if so, what is the best course of action? Who should we go after? Or should we wait for our lender to sort it out with the investment company as they own most of our home and would probably want to make sure they are first lien? Should we contest our title insurance coverage determination? Should my title insurance be covering this or can they get away with not covering only because they listed the memorandum under our preliminary title search? And should we go after our realtor and their broker? Also, if we do nothing, can the investment company foreclose on our home if we don't satisfy their lien?
Please if you have any kind of information that can help us, please let us know. Thank you in advance..
The first thing we did was reach out to our title insurance. They were in contact with this investment company and as it turns out, according to them, it is a valid claim. They then proceeded to issue a coverage letter stating that they provided us with a copy of this memorandum listed under the exceptions of our title insurance during closing. We went back to our documents and did see this memorandum listed under the exception of our preliminary title search. However, to us, this didn't mean anything. It was listed as a memorandum, not a lien, or a deed of trust. In conclusion, because they listed the memorandum and notified us of this, that supposedly allows them to deny our coverage. Which doesn't make any sense to us, given that sure, they told us there's a memorandum, but they did not tell us there was a lien or deed of trust unsatisfied on our property. As a first time homebuyer, I would think that my title insurance would do more to cover me.
Because of their decision, we then turned to our lender to help us. Since they own most of our property, we figured they'd be concerned that they are no longer first lien holders to our property. We also learned that the lender this owner had (that went into the agreement) was the same lender we have currently. So I made them aware of this. They let us know that they are admitting to the fact that they missed this lien when they approved my loan. They also let us know that they did also miss the lien when that other owner sold the house to the owners before me. So it sounds like it was missed twice. At this point in time, all they have been telling me is that they are doing research. And trying to figure out whether to get their legal department involved. I know that we purchased lender's title insurance when we bought the home so I am hoping that's another avenue they will look into.
Well in the midst of all this, I got another letter from the investment company - demanding that we settle this lien in 2 weeks or else they will use other remedies available to them to settle this lien. I of course started to panic, so I called an attorney. After going over the situation briefly, he stated that the only other person he can think of that we can go after is my realtor and their broker as they should have given me the heads up when this memorandum was brought up. I also learned that they have insurance they can initiate on their end if needed.
I guess I am going on here to ask if anyone has dealt with this type of situation and if so, what was the course of action and outcome? We are just so lost. Reading over the deed of trust, it states that the investment company has to give consent for the house to be sold. It also states that if the house is sold the lien must be satisfied. So we are just so confused about what to do given that the house was not only sold once, but twice and this lien was never satisfied. How can they make us responsible for it when we are not the ones who went into this agreement? We understand that it is a memorandum running with the land, but we did not sign that memorandum or deed of trust. And why is it that were the ones responsible when there were owners to this house before us that were also not the ones who went into this agreement.. but they got away with selling the house to us? I just don't get it..
Should we get an attorney? And if so, what is the best course of action? Who should we go after? Or should we wait for our lender to sort it out with the investment company as they own most of our home and would probably want to make sure they are first lien? Should we contest our title insurance coverage determination? Should my title insurance be covering this or can they get away with not covering only because they listed the memorandum under our preliminary title search? And should we go after our realtor and their broker? Also, if we do nothing, can the investment company foreclose on our home if we don't satisfy their lien?
Please if you have any kind of information that can help us, please let us know. Thank you in advance..
