[LOwens]

Hello,

I recently became engaged and began looking for a home in my fiance's hometown. I was aware that he previously owned a home that he "walked away from" in January 2006. He was given a mortgage loan that he was in no way able to pay for. He spoke so fondly of the home that I wanted to see if it was for sale. During the process, I drove by the home a few times and saw that no lights were ever on and no vehicles were parked in the driveway, so I was excited that the home might not have a new owner yet and may be for sale. I contacted the town's tax assessor to find the owner and was told that my fiancé still is the owner on record. I responded to the tax assessor and asked if the clerk might have new information about the owner of said property and was told that there was a corrective deed filed on 7-31-08 confirming that my fiancé is the owner.

I have lots of questions. If the lender owns the property, do they usually correct the deeds in a timely fashion after the mortgage is in default? Is the owner's signature required when a corrective deed is filed? Is it unusual to have a name on a deed of an owner who defaulted 3 years ago or is this the norm? Why would it be advantageous for a lender to file a corrective deed in his name instead of theirs? Do we need an attorney?

[LisaB4657]

When a person defaults on a mortgage, the deed information doesn't get changed until the lender completes a foreclosure and the property is sold at auction, or until the owner gives the lender a deed in lieu of foreclosure.

If your fiancé defaulted on the mortgage and the lender hasn't completed the foreclosure, or if the property hasn't gone to auction yet, then the registered owner should still be your fiancé. However I can't understand why a corrective deed would have been filed. A corrective deed gets filed when there was a mistake made in the original deed, such as a typo. It's possible that your fiance's lender did a title search and found that the person who sold the property to your fiancé made a mistake on the deed that wasn't picked up at the time. A corrective deed from the original seller could have been filed to correct that mistake without the need for your fiancé to sign it.

If you're really interested in getting that home back for your fiancé, the way to do it would be to speak to the current lender to see if something can be worked out with the existing loan, or speak to a new lender about getting a new loan in both your names to pay off the existing loan.

[LOwens]

Thank you Lisa! I will contact the lender. He hasn't made payments since 1/2006. His monthly payment on a 30 year loan was $2300 for a home that he purchased for $210,000. Would his credit be negatively affected if the lender has not completed the foreclosure yet? Should he have been contacted when the corrective deed was filed? Would he be within his legal rights to move back into the home if he is still listed at the owner on the deed?

[LisaB4657]

Thank you Lisa! I will contact the lender. He hasn't made payments since 1/2006. His monthly payment on a 30 year loan was $2300 for a home that he purchased for $210,000. Would his credit be negatively affected if the lender has not completed the foreclosure yet?

It will be negatively affected by the default but not as much as if the foreclosure was completed.

Should he have been contacted when the corrective deed was filed?

Not necessarily. It depends on the reason for the correction.

Would he be within his legal rights to move back into the home if he is still listed at the owner on the deed?

It depends on the status of the foreclosure. If it has already gone to auction then he wouldn't be able to move back in. If it hasn't gone to auction then he probably could move back in, but once the lender found out they would most likely proceed with completing the foreclosure, putting the property up for sale and having him evicted.

The best way to get the house back would be for the two of you to negotiate something with the lender. In the current economic climate I'm sure they would much rather have someone living there and making payments rather than sitting with an empty house that they can't sell.