Post Foreclosure Purchase Question

[paramount]

A couple of years ago a friend bought a foreclosure (Corona area).

He is absolutely current on the mortgage.

A few weeks ago he began receiving letters (certified and otherwise) stating a lien of 13k was owed from 2006 and that the house is in pre-foreclosure, with a sale date of April 2012.

A few realtors have even knocked on the door asking if they were interested in selling in addition to mailers with similar offers.

The debt collector is named ndex west.

What in the world do they do? Thanks for any info!!

[SD Realtor]

First thing he should do is to dig up the preliminary title report that he received when he was in escrow. That preliminary title report should have all of the liens that were filed and recorded on the property prior to purchase.

Technically, to be honest when a home transfers ownership, the new owner is actually liable for any previous liens.

Without knowing the specifics it sounds like this lien was probably a second that should have been wiped out when the home was originally went to trustee sale. I am assuming your friend bought it well after 2006.

So that is your very first step, get hold of that preliminary title report, check all the liens on it. Then get hold of the original title officer and ask them why this lien was not identified. You should probably check to see when this lien was originated and recorded as well.

It may not be a bad idea to talk to an attorney. Ignoring the problem is not a good idea. Your friend may also want to call ndex as well to get more details and dates to see if they line up. Also he should get the date of the original trustee sale and then let ndex know that. Somewhere someone slipped up. Should be resolvable.

[paramount]

Thanks for that info SDR – and that’s exactly what he’s been doing – ignoring it.

He felt that if he signed for the certified mail, he would in a sense be acknowledging the debt or somehow be liable then for the debt.

[paramount]

The other question is could ndex really foreclose on the house?

[SD Realtor]

It would not be responsible for me to speculate on whether ndex could or could not foreclose on the home. Lets see what some of the dates are with regards to when the original lien was filed (the second loan) verses when the foreclosure occurred. Also lets see how his conversation goes with the old title officer as well as what he digs up with the preliminary title report. A quick conversation with the title officer should help alot. Chances are that since it was so long ago the title officer will not recall so he may want to have a copy of the title report when he calls them. Also he should call ndex first rather then sending them anything back but definitely he should not ignore them.

[temeculaguy]

Firstly, paramount, I owe you a long overdue apology for comments I made a few months ago, here it is, I’m sorry. It had nothing to do with you, but I took it out on you, mea culpa, I behaved like an ass.

Now about your friend, we all pay that stupid title insurance when we buy or refi, I usually complain about it, but this is what it is for. That title insurance company took between $500 and $1000 from your friend for a ten minute search (on refi’s it’s a total racket) but this is a scenario where it pays off and it’s why the lender mandates it. The lender will lose far more than your friend if this foreclosure were to happen. If the title insurance company missed it, then they can pay to fight it, and if they lose, they can pay to remedy it. That was their only job, they usually get it right, but once in a while they have to pay, which is why it’s caled insurance. Advise your friend to dig up his loan docs, find out who the title insurance company is and start with them.

[Anonymous]

Good info on this thread.

TG is right that title insurance is likely what will protect him.

What he should NOT do is nothing, of course. He should start making phone calls.

A call to the title insurance company may do the trick – they know this stuff and they’ve got the lawyers. It is also their responsibility to follow up/honor their policy. How well they actually respond is anybody’s guess, but they definitely have a stake in this situation.

Otherwise he’s going to need his own lawyer. It is very unlikely this will go away without a lawyer at least writing a letter, and possibly doing more. Hopefully the title insurance company will provide the legal ammunition.

Please follow up on this thread as the situation progresses. I’m curious to learn how it works out.

[SD Realtor]

It may not be a bad idea for your friend to call his lender as well to explain what is going on. Now recall that the title insurance policy is protection in the form of a payout. The policy itself will not prevent the foreclosure. Also the title insurance policy that protects your friend is not the same policy as the one that protects your friends lender. When you were in escrow there was a search that was done that went through the title history of the property. This is where that lien would have been identified.

Now my guess and it is a big guess… Is that all of this was indeed identified in the report and somehow ndex screwed up when the original trustee sale happened. I could be very wrong though so you never know.

I think a call to ndex right off the bat can straighten it all out.

[Author]

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