Has anyone ever had this happen?
I've worked my tail off on this nice renovted historic home with 66 acres that rents for 3 or 4 times the average rent (probably due to the mortgage amoutn)

CFK, Lease agreement. ...... the tennant knows how to milk the system. Finally went to court to evict.

This week i receive an email from Fannie mae that says:
This property has been eliminated from Fannie Mae ’s inventory due to an invalid foreclosure. Please stop all efforts immediately on this property.

I think it's another stall tactic by the occupant. The former owner is in Hawaii. property in Tennessee. Rent was handled thru property mgmt company.

I think they are all in cahoots! I think property management company scammed the rent. Property management company even gave a letter of recommendation for the occupant.

heck, the occupant is a shiester. After jumping thru hoops to get a lease agreeement, the occupant refuses to sign it. Then the Asset manager has to send the file to evictions. The occupant is just "Buying Time".

anyway. Once they figure out (in all likelyhood) that the forclosure was in fact Valid, and it gets back in que for to be listed, I feel like it may go to another agent after I've worked my tail off with this low life of a tenant.

Anyone else ever have a listing STOP mid process due to INVALID FORECLOSURE???

Google "Ibanez MA foreclosure" or something to that effect.

One of my AMC's lost 29! properties in one day due to invalid foreclosures in MA. It is a HUGE deal here.

Basically (really basic) is that, in a case where the mortgage was transferred to a different bank, the attorneys did not record that assignment until AFTER the foreclosure complaint was recorded. So, from my understanding, an assignment might have taken place on 1/2/2008 and didn't get recorded. Then the foreclosure complaint was sent out and recorded on 2/2/2008 in the name of the new bank BUT the assignment was recorded on 3/2/2008 (or even NEVER recorded). So it's now an invalid foreclosure.

Makes sense to me. If attorneys had been doing their job as they were supposed to there would be no issues. Going to take months and months to re foreclose all these properties properly in MA.

It could be for real, they are getting very sloppy on foreclosures in some cases. I had one not long ago that there was a valid Chapter 13 bankruptcy in place two weeks before the sale but it went to sale anyway. Ooops.

Sounds more like the occupant got awarded 90 days to remain in the house by the judge under the bona fide tenant rule. I have heard of foreclosures being invalid, but I think its rare.

We have had several. One they did not foreclose on the exwife so it has been sitting for 9 months (it was found by title after a signed purchase agreement was in place. They even tried to auction it after and I kept telling them it had a bad title but they took it to the wire before stopping the auction. We do usually get them back though.

I had one with Nationstar. I had a great offer on the table and they dragged for 3 weeks with a repsonse. I kept getting the run around. The they dropped it on me. I am not a fan of this. Get your cr@p straight, then call me.

Thanks for all the reply's. I'm thinking Jgizzi is right. I like his theory. The tenant actually thinks he has a lease until december. Under TN landlord and tenant act, the new owner can give a 30 day notice to vacate. I wish I had gone to the foreclosure hearing. (but I wasnt invited. lol).

Can this sort of problem be addressed with a Scrivener's Affidavit?

I had one, the day 3 offers came in it got pulled and was in "litigation" AKA nice way of saying we messed up.
6 months later I got it back.
I kind of knew it was coming back, since they kept on having me do MSR'S while it was in 'Litigation".

Had to google that one but it looks like it is for Missouri only.

Anyway, don't think there is anyway around it as banks are now "re foreclosing" on all properties known to have been invalid foreclosures. I'm sure its going to take months to find them all and then months to re foreclose.

Here’s my understanding. This started as a case challenging if the NOD had to be in the local paper or if any paper with a circulation in the properties’ area was sufficient. Judge Long ruled that the publication was sufficient. However, to gain his 15 minutes of fame, he ruled that since the statute ONLY allowed the mortgage holder to foreclose, the assignment must be dated prior to the first publication of the NOD. I.E. the assignments were being signed at some point after the NOD. The defending lenders position is that the transferring parties have a contract transferring the mortgage; however it’s not in recordable form. (Does not meet the Registry of Deeds recording requirements). They argue that the law does not require “recordable form”, but only that that mortgage has been transferred. They further argue that this is based on various case law going back 143 years.
BTY, a similar ruling took place somewhere in the Midwest about a year ago.
As a result of this ruling, the title companies will not insure any new FCs where the dates aren’t sequential. However, they will insure over a property where they’re already on the hook. That last sentence is directed on those properties that have sold over the last 143 years and the dates were not in proper order. Those sales now have a cloud on the title.
Regardless of whether or not Judge Long overturns or upholds his ruling the opposite party will probably appeal. Ibanez is now represented by counsel, as are the lenders. One local attorney expects that this will drag on for a year.
From what I’ve experienced, this is affecting about a third of the properties that were in the pipeline. Those that closed recently (up to 143 years ago), are valid sales, but with a title flaw. Those that have not been conveyed are the items biting us.
Although this is a Massachusetts specific ruling, I would not be surprised if another jurisdiction has a jurist looking for their name up in lights.
There’s a ton of info available via Google at “Ibanez land court”.
Just to emphasize, this is my understanding, NOT a legal opinion.

JackREO - "those sales now have a cloud on the title" from your post above:

I think I even caught a bit on the news that a buyer of a foreclosure is now trying to sell and is stuck with the property until this is cleared up. Is that your understanding also?

What a mess!

That's not what I was told. I had received some correspondence from an attorney that handles a bushel of FC's. It contained a memo of instructions from the major title companies. It stated that the title companies would reinsure those properties that they already had policies on, but would not take on any more without the proper date sequence. I also watched the newscast and was suprised at how little information they supplied. If a buyer purchased a FC without title insurance, they're out of luck with regard to title insurance. BTY, I had 30+ properties either bust out of contract, pulled from active to "on hold" of placed in special exception due to this. What I also found interesting is that when this ruling first went down I was the party that notified my seller's of the issue rather than their attorneys. Says a lot about the way our industry is structured!!!

I am amazed that some of the (buyers) attorneys I've spoken, even up to last week, had not heard of this case.

I had a listing that was in eviction and just when the occupants moved out, the asset manager told me that the foreclosure was being cancelled because of a bankruptcy and might come back to us later. The property stayed vacant and safeguard put a lockbox on it. It's been a little while. During a search on the MLS, I see the property is now listed for sale as a short sale. What you think?

In times like these who really knows whay happened? The bank could have mutually agreed to turn back the clock. The are under sever pressure by the gubmint to help homeowners in distress.

This isn't against you, jgizzi, but I am so tired of hearing this line. You want to help a homeowner in distress? Get them into a property where they can responsibly make payments. Stop trying to keep them in something they obviously can't afford.

I am amazed at the attorneys handling the foreclosures for the banks! I cannot believe the mistakes. I have yet to have a clear to close at the initial date. I have sold one house three times now and still.....??? I even bought a little house months ago that has not closed...because it never "foreclosed"!!!

The general public really does not see all this background mess,and probably a good thing, since no one would be buying.

Bottleneck with fc atty on FHLMC assets is that they do not respond to title companies on the issues. I had to escalate and it ended up the servicer had to light a fire under them. half a dozen on hold

Hello all! Im new here and have came to this forum for help in my struggles. Has anyone heard of this happening? This is a letter I wrote to Benny Kass but have not got a response from him. Im hoping you all can help. Thank you kindly!!

Dear Benny,

We are first time home buyers with pre approved funds to purchase our first home. After a couple months of searching we located a foreclosed property for sale. We made an offer in early March which was accepted and a closing date was set barring any inspection complications. During the inspection we found the plumbing had burst pipes and needed to be repaired. We contacted the representing real estate agent and asked for more money back or for them to repair the pipes. By this time the first closing date was missed because the seller couldn’t produce a clear title. They lowered the purchase price and set a new closing date on our new contract. The second closing date was missed because of title issues once again. We signed an addendum with a third closing date and were assured we would be closing on this date. That date has come and gone.
We have been told that the property had three tax liens when the bank initially foreclosed. Apparently a fourth lien fell on the property after the first foreclosure. We are now being told the bank has to re-foreclose on the property for a second time. This was told to us in June. We have no contract on the property but were told the bank will give us, “first right of refusal” when the property is ready to be sold. I have already had the house inspected twice and have over twenty five hundred dollars wrapped up in this house that include minor repairs that were approved at my sole expense.
My questions to you are this. Is there any way to find out what step of the second foreclosure the bank is in? The selling realtor is telling us they can not get a hold of the banks foreclosure attorneys. We are set to gain equity if this house does indeed close. How long do second foreclosures usually take? Is there anything else we can do to help this move forward? We are worried we will not close on the property before November 30th and lose the tax credit money. What are the chances of the bank clearing the title and selling us the property at the last contracted price? Also we rent a house owned by family. We have no date we have to move out.
Thank you very much for your help in this long and frustrating process.

Hi NeCat;
The first comment I’ll make would be directed at your buyer agent. I believe he/she should be chasing these answers on your behalf. As a listing agent, I have numerous conversations with BAs looking for updates. I don’t always have the answers, but it certainly indicates the BA is attempting to service their client. In addition I question them not putting up a red flag regarding your cash outlays prior to conveyance.
Second are the changes to the entire FC process. What was once a smooth operation has been overtaken by the sheer magnitude of the default rates. That’s not an excuse. Anyone vested in the REO process should have seen the housing bubble about to burst (with the exception of NAR which has always claimed there was no bubble). The only surprise should have been that it took so long to happen. Many FC attorneys, agents, contractors and such didn’t staff up until they were totally swamped. Even then, I wonder if they were getting bodies by waking up folks off the park benchs. Hence, sloppy work on many levels. Then along comes the delays associated with legislation designed to postpone the inevitable but give the public a warm fuzzy feeling. Those that ramped up, now had to lay off, then rehire, only to lay off again. Stutter step staffing, but it did generate the appearance of positive action.
Now on to your question. (finially) Will things get cleared up by November? Many of my sellers are reforeclosing or filing through land court to clear titles. That ties things up for 1 to 4 months, depending on the extent of the title flaw. There’s also no guarantee this FC will still be yours after the title is clear. It could sell at the auction, be part of a bulk sale, bought by another buyer, any number of issues.
If I were your buyer agent, I’d take you shopping. If you find something, so be it. If not, you can keep an eye on this property while you’re looking. Might not be what you want to hear right now, but I’ll bet you would have liked to hear it 3 months and $2,500.00 ago.

Thank you very much. You are so right on many different levels. I finally got ahold of the FC attorney and she told me exactly what you just said. They would serve the previous owner, he had 30 days to answer, after that they publish public notices for 5 weeks. Then it goes to the public auction and if no one buys it, then the bank owns the house again. 120 day process and my "first right of refusal" is a long shot.
Im glad Im learning this now though, having already wasted 6 months waiting.

I have another question for you. Have you heard anything good information on next years tax credits? I read about two in the usa today, one is 15k and the second is 8k to ANY homebuyer. Im set to gain about 30k instant equity on this property so I am still interested in waiting it out possibly.

Thanks again for your information. It is greatly appreciated!!

Hi NeCat;
I haven't heard anything about extending the buyer credit. My guess, and it's just my guess, would be an extension since it is having a positive influence on home sales.
Good luck!!!

NeCat,

Did the seller of the property give you permission in writing to make the repairs? I'm assuming that the $2500 outlay includes inspection fees, appraisal, and repairs. How much earnest money did you have in the property? Has that been returned?

Here's the latest information:


Thousands of foreclosed homes continue to have clouded titles after Judge Keith Long of the Massachusetts Land Court reaffirmed his March decision stating lenders without properly accorded assignments cannot foreclose.

Long ruled in Hampden County Land Court on March 26 that two foreclosures in Springfield were invalid because the foreclosing institutions could not prove they owned the property at the time of the foreclosure auction.

Ablitt Law Offices, the lawyers for U.S. Bank and Wells Fargo, the two loan servicers involved, filed memos in June to have Long vacate his own decision.

Today, Long denied the motion to vacate, stating in his decision that the issues "are not merely problems with paperwork or a matter of dotting i's and crossing t's," instead that "they lie at the heart of the protections given to homeowners and borrowers by the Massachusetts Legislature."

Wells Fargo Bank and U.S. Bank did not officially have proper title for the properties when they published the foreclosure notice, or when they held the foreclosure auction, as the law requires. The servicers had assignments dated 10 and 14 months after the auction, respectively, but had backdated their title claims so the assignments were effective prior to the auction date.

Ablitt began this process by filing a suit to get the opinion of the court whether a foreclosure notice posted for a property in Springfield could be published in the Boston Globe, instead of the Springfield Republican.

Ablitt and its clients can appeal the decision in the Massachusetts Appeals Court. Calls to Ablitt Law Offices seeking comment were not returned by press time.

Bump

I made an attempt at CFK yesterday to the previous owner's relative, who also occupies the property, as previous owner was not home at the time of my visit. I explained CFK and asked the relative to have the owner call me asap as this is time sensitive. The occupant didn't question or say much at all.

I get a call today from a company I've never heard of to inform me that the home was mistakenly foreclosed on. I took the name and phone number to pass on to my AM.

Is anyone else dealing with this, if so, what is the outcome?

Thanks

truno

Why is it I get this gut feeling this was a bogus call?......Did you ask them how they got your name and phone number? I just find it strange you got a phone call within 24 hours of making contact with the occupant. The call may be valid....just doesn't feel normal.....contact your AM.....the ball's in his court.....just my two cents.

Is it not always a mistake and a surprise... I know I've heard that one before.

Truno you will have to flesh out over time if it is valid or not. Most times it is not but sometimes I have seen foreclosures overturned. Some examples are a proper foreclosure process was not followed by the foreclosing attorney,papers had wrong or impartial names on them etc.,not all parties were served with the foreclosure notice, owners filed bankruptcy to stop sale and bank lost notice,a loan modification was agreed to and in force in writing and the foreclosure department dropped the ball etc.

In these cases and others the foreclosure will be ruled invalid and overturned by a court.

Now most of the time you have a professional seller buying time. By saying this comment they will buy a month or two while the bank/servicer figures out if the complaint is valid or not. The last thing they want is a valid lawsuit for damages if they made a mistake. It's clear either way they are not currently interested in a cash for keys. You need to notify AM and they will tell you how to proceed. Eventually the foreclosure will be overturned or they will have bought more time and accept CFK or be evicted and you will get a listing eventually.

We average about 1 in 50 that has a bad foreclosure. It takes 4 months to a year to get it straightend out. We have one right now that has been nearly a year for a PP eviction!!!

We never find out that there is an issue with the foreclosure until it is under contract and can not close. Most companies cancel the agreement as they do not yet own the property but we have one that is actually keeping the contract in place and just extending the close date.

Candyman- My info was on the CFK form.

Thanks for all your input!