Replies to This Discussion

Permalink Reply by Eric M. Boyd on June 4, 2010 at 8:07am

If I'm reading this correct, that would be a dream come true! Is the presumed loan balance substantial? If they find it to be non-existent, would the first mortgage still need to be a short sale?

Permalink Reply by Jeff Payne on June 4, 2010 at 8:25am

I believe that title insurance would cover this if it popped up later, but not sure

Permalink Reply by Stephanie Lim on June 4, 2010 at 10:59am

Dream come true is my thought too. Can you imagine? After speaking with the attorney, he is a bit concerned. Title came up without one a second but we were "notified" that there is one. He feels like he needs to get documentation from the bank that the loan does not exist. He also had me as the sellers more questions, and ask if they have their original paperwork. His concern is that at some point in the future someone could say it was a fraudulent transfer of title because of an undisclosed encumbrance. That being said, how to do pay or negotiate with someone when you don't know who they are or if they even exist. When the foreclosure was filed the first lienholder did not name a second on the suit. He also thought title insurance would cover it, as that was my question....also thought that there was a good argument that they never recorded it therefore there was no claim. Such interesting times, huh?

Permalink Reply by jennifer Lynn on August 30, 2010 at 1:49pm

Where you able to short sale this home without the second mortgage? I am having the same kind of problem yet my 2nd was never recorded. Maybe from your run in on this you can answer some of my questions.

I am currently in short sale on my home in florida. I have an approval from my mortgage company and they want the deal closed in 20 days. I called to negotiate on my second mortgage today and they wont seem to budge. I then found out that the second mortgage was never recorded. Also the second mortgage company stated to me several times that the personal loan would not be relieved until the full amount is paid. They also wanted me to sign a second promise note on this. (I wont sign it) My paperwork on this second loan is done as a second mortgage, not a personal loan. Due to the second mortgage not being recorded I can close on this short sale and not include them. After doing so can the second mortgage go after me as if this were a personal loan? How can they state and show their paperwork as a 2nd mortgage, not record it and expect me to pay it as if it were a personal loan. Is this Illigal for them to do this? Yes, it helps in the short sale that the loan is not recorded. But what is the back lash from this if any. I know they can not put a lien on the property after it has been sold.

Permalink Reply by Kelly Timm on September 2, 2010 at 3:19pm

It would be a dream come true. A friend of mine was VP of Loss Mit at Chase for 9 years. She said this happens where loans get paid off in error or just disappear. I would think title insurance would protect the seller in this case. Amazing!! I wish some of mine would just disappear!!