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Chase Bank SNAFU blocks sale of home

By Cynthia Larsen

Real Estate Broker/Owner CalBRE# 01433049

August 13, 2015 05:37 AM

Chase Bank SNAFU blocks sale of home

Trust Deeds for HELOCs (Home Equity Line of Credit) are common in my selling area. So common, that when you see a second deed of trust on a preliminary report with a recording date much later than the primary loan, you don't think twice about it.

That is, until you go to close escrow and you find out the deed of trust doesn't belong to the seller ... it belongs to the previous owner.

So how did this happen? Chase Bank recorded the HELOC deed of trust 9 MONTHS AFTER THE DEED WAS SIGNED, and 6 MONTHS AFTER THE HOUSE HAD BEEN SOLD!

May 30, 2002 - Previous owner signs trust deed for a HELOC
August 20, 2002 - Previous owner sells the house to the current owner
February 26, 2003 - Chase Bank records the trust deed that was signed 9 months earlier

Fast forward to today. The title company realized we had a problem when the escrow officer requested a payment demand on the HELOC. Chase Bank wouldn't talk to her because the name and SSN did not match that of the seller.

So now we had to find the previous owner, hoping he was still alive and still in California. We found him in Sacramento through property records, then traced his phone number. He has fully cooperated, giving us permission to talk to Chase Bank. That was two weeks ago.

We are getting nothing but the runaround from Chase Bank and two innocent parties are suffering from it. The seller, who has moved, has already made one mortgage payment she shouldn't have had to make, and is now facing another. The buyer has spent hundreds of dollars in inspections and has two fast approaching deadlines: A loan lock, and a 1031 exchange.

The escrow officer said there wasn't anything I could do to help out, hence my Chase Bank rant. Because of Chase Bank's SNARU, things are now totally FUBAR.

Do the right thing, Chase Bank. Admit your mistake, answer our request for a demand for payment, and record a reconveyance on that HELOC trust deed so we can move on with our lives.

Chase Bank SNAFU blocks sale of home

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Liz and Bill Spear

Transaction Alliance 513.520.5305 www.LizTour.com - Mason, OH

Transaction Alliance Cincinnati & Dayton suburbs

Cynthia, Looks like another case where logic and a bank can't be in the same room together. Hope you are successful getting them to correct this ASAP.

Aug 13, 2015 07:41 AM

Chris Ann Cleland

Long and Foster Real Estate - Gainesville, VA

Associate Broker, Bristow, VA

What a mess! It took them nine months to record a deed of trust? Is that their fault or the title company that did the closing?

Aug 13, 2015 08:10 AM

Troy Erickson AZ Realtor (602) 295-6807

HomeSmart - Chandler, AZ

Your Chandler, Ahwatukee, and East Valley Realtor

Cynthia - Wow, this sounds like a real mess. I hope this all works out for the current seller and the new buyer. Hopefully Chase will step up and do the right thing.

Aug 13, 2015 08:22 AM

Cynthia Larsen

Cotati, CA

Independent Broker In Sonoma County, CA

BLiz, my first thought when I found this out is that this will be worse than a short sale. The escrow officer said she has worked more hours on this deal than most, and she has been doing this kind of work forever. If she had thoughts of retiring, this deal might be the straw.

Chris - this deed of trust was for a line of credit. Chase, according to the escrow officer, was using a 3rd party vendor to record their deeds. Maybe the paperwork got lost for a very long time? We are scratching our heads. We don't even know if the previous owner ever drew money from their credit line ... Chase won't talk to the escrow officer even though she has sent an authorization from the previous owner who signed the deed. It should be as simple as an agent talking to a bank during a short sale after getting authorization. But noooooooo.

Troy - Oh I hope so too, thank you. The listing agent has a livid seller on her hands and I have a very anxious buyer on mine. The escrow officer is fit to be tied.

Aug 13, 2015 10:44 AM

Tammy Lankford,

Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA

Broker GA Lake Sinclair/Eatonton/Milledgeville

Oh Snap! I don't even know how this could happen.

My recent experience with a HELOC was bank did a Deed in Lieu instead of a foreclosure and didn't address the second loan AT ALL. Yeah, that one was mess. Didn't close. Months later it's pending again, but should have closed months ago.

Aug 13, 2015 01:15 PM

Tammy - I've never seen this happen. Usually a bank would RUN to the recorders office with their deed of trust, not wait for 9 months. I'm not even sure that what Chase Bank did was legal. Our deal was supposed to close Aug 3rd, the clock is ticking.

Aug 14, 2015 02:18 AM

Carla Muss-Jacobs, RETIRED

RETIRED / State License is Inactive - Portland, OR

Isn't that what the previous owner had title insurance in place to prevent? WOW that's a SNAFU . . . and I CAN NOT STAND CHASE!! I had a Chase loan close last week and they are nuts! Nothing along the lines of that, but just another reason for me to question them AND their loans!

Aug 14, 2015 06:40 AM

Carla - It baffles me that ANYONE can walk into the recorders office and record whatever they want on anybody's property. There are no checks and balances in place to make sure that a lien type document was signed by the rightful owner, or has authority otherwise (like the tax collector). I haven't had ANY buyer use Chase and I will dissuade them from using Chase if given the chance.

Aug 14, 2015 08:16 AM

Update: Yesterday, after the escrow officer had spent a total of 11 hours on the phone with Chase Bank, the seller threatened legal action against Chase. Chase promised to have the necessary documents to remove the liens in our hands by Monday. We'll see.

Aug 14, 2015 08:17 AM

Chase Bank SNAFU blocks sale of home

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