Todays question is regarding foreclosure deeds: "How can a bank sell a home when they did not record the foreclosure deed saying the bank is the owner?"
It is common occurance accross the whole country, The situation arises when the bank takes back or buys back the property at the foeeclosure auction. the problem occurs when the foreclosure deed does not get recorded after the bank takes ownership.
What happens after the foreclosure auction?
After the foreclosure auction the bank takes possession of the property if vacant. if occupied they will evict the occupant or offer them a cash for keys agreement to get them out. Once vacant, they take possession and secure the property.
Once they have possession, they usually give it to an asset management company to sell. The property is put up for sale, an offer is accepted, the buyer will get a clear to close and the buyer closing attorney will conduct a title search.
THE PROBLEM IS...
The problem then is that if that bank has not recorded the foreclosure deed, the new sale can not close until it does.
THE SOLUTION IS...
the solution is for the buyer attorney to get the foreclosure deed to record it and then be able to close the new sale to the new home owner.
Unfortanately it is common, you can head this off by simply asking the listing agent to check and see if the foreclosure deed has been recorded or to complete a title search on your own.
Sometimes they have the deed on file and just need to record it, other times it may cause a weeks delay in closing.
UPDATED August 8, 2010
AGENTS, BUYERS OR SELLERS PLEASE FEEL FREE TO POST YOUR COMMENTS OR SUGGESTIONS ON THIS HEATED TOPIC.
Blog written by:
Godzyk Group Realty