I just bought a house in FL. Seller was having "family issues" and had to sell for loooow. Skeptical, I was assured that home wasn't in foreclosure. This is 1st time purchase so I don't know all steps involved. At closing I ask seller if his title was clear for the home and with the HOA. He says yes. So does the title company that I"m paying for.
I move in.
Last weekend a process server knock on my door looking for Seller. I tell him Seller doesnt live here anymore and he tells me this is related to foreclosure of Seller.
This is the 1st time that "foreclosure" is spoken in the realm of this house to my ears. I'm pizd! I haul to the courthouse and lo and behold... foreclosure proceedings against Seller for the house w/ a default judgment.
My title company should have found this out, right?
Now, what do I do? I don't know who to approach 1st- title company, foreclosing lender's attorney, my lender, etc.
Any advice?

Were you represented by an attorney at the closing? If so, I would start there. If not, then start with the Title Company - the whole point of title insurance is to cover this type of thing.

You need to talk to your attorney.

You did have an attorney, right?

Your title company is the one who goofed and didn't properly search the title to the home. They are to be held liable for this.

I'm puzzled. If you bought the house, your escrow agent had to get a payoff on the loan. The escrow officer would have been notified that the house was in foreclosure and any pending sale date.

At any rate, your new mortgage loan paid off the old loan that was in foreclosure. Probably; the foreclosure process was so far along that the Trustee didn't get notification that the loan had been paid off before they had the servicing agent drop by. Really shouldn't be a problem if you did use an escrow agent.

Hello pissed:

I don't know who you're mad at or why. The old owner was in foreclosure. You bought the house. Now the house is NOT in foreclosure. You own it. What's the problem?

excon

Wasn't a formal title search conducted prior to closing? I can't believe that a pending foreclosure would have been overlooked. Your best bet now is to consult with a real estate attorney or with the realtor who assisted you with the purchase.

Quote:

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Originally Posted by excon

Hello pissed:

I dunno who you're mad at or why. The old owner was in forclosure. You bought the house. Now the house is NOT in forclosure. You own it. What's the problem?

excon

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Foreclosure is not her issue, it is the judgment on the property that she is in a pickle over.

As far as I know, that title won't be able to be transferred until the Judgment is paid.

If she did not have an attorney, she has a real mess to deal with.

If you bought the property before there was a lien put on the home, they can not put one one the home. If they filed a lien prior to the sell, but they can not file a lien to foreclosue after it is sold.

But you need to get your real estate attorney invovled. And of course this is why you buy title insurance which would have to pay to clear the title.

Just curious: when did you purchase the home? You didn't have an attorney, did you? Most buyers don't.

And as I noted, if there was a title search done, then after you bought it, they can not put a lien, if the seller was not in foreclosure at the time he sold it, there is no notice to be given,

A default judgment is generally issued against the previous owner when the home is foreclosed on and the selling price does not cover the entire amount. The lender can go after the previous owner for the difference. It doesn't happen often and it is something that shouldn't run with the land. It is against the previous owner.

Please keep an eye on the dates - this post is over 2 years old.

There are newer threads on this same subject which could be answered.