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Refinancing Home Mortgage
In: Mortgage Lenders
3 Jun 2010Two properties were own by the same entity. One property has a structure on it and the other is a vacant lot adjacent and immediately next to the one with the structure. An addition was put on to the existing structure encroaching 15 ft. into the vacant lot next to the property. The homeowner had the vacant lot free and clear but had a mortgage on the home and took a second mtg. on the existing structure to add on to the house. After the addition was completed, the owner files for bankruptcy leaving the vacant lot to sell at a bankruptcy auction.
We purchased the lot at this auction and were aware of the encroachment. Pryor to the lot auction, the court trusty contact the lender that held the mortgage to resolve the issues but the mortgage company did not respond. The first mortgage institution now has filed all required documents and the property with the structure that has the mortgage is coming up for auction at a Sheriff sale.
We suspect that the mortgage company will be the highest bidder to protect their interest and purchase the property. At this time we are assuming the mortgage company will either try to clear the issues with us or list the property for sale and deal with the issues when the time comes.
Should we file a document against the property to make a prospective buyer aware of the problem or let it go to see what happens?
This is about mortgage information questions.
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3 Responses to Adjacent Real Property Encroaching on Our Vacant Lot?
wizjp
June 3rd, 2010 at 9:41 pm
What would you file. Short of filing suit in district court against the owner of record to condem the structure and having a lis pendens of record forcing a legal action on your part, it is probably in your best interest to just wait until there is a non institutional owner of record and pursue action against them. Hopefully their title company will pick up the encroachement and someone will begin to work with you to clear title.
Ross
June 3rd, 2010 at 10:14 pm
When a title search is done and the deed and the property description say nothing about a building on it and one is there that should through up a flag. When the bank gave the loan to build on the property they should have placed a lien or something on the property. Not sure how things ended up the way they are in the first place but I would say their is an issue here that should be discovered early on.
At this point an attorney should be consulted.
You are under no obligation to do anything unless you are a Licensed Real Estate Agent ot it is your property.
I am somewhat confused. If you are buying this property STOP until EVERYTHING is cleared up.
goz1111
June 3rd, 2010 at 11:03 pm
I would at least be looking for a good real estate lawyer in your area for an opinion on the cost to litigate this is civil equity court
What is probably going to happen is the first lender takes back the property and list it for sale they will not spend the monies on a survey, they will get a offer but the deal will fall through because the title company should not agree to insurance the building with the encroachment
At this point the lender legal department will get involved, they may and try and work out compensation for the 15th feet, or may seek to try some type of litigation in civil equity court;
Remember equity court is not small claims we are now in big league so to speak, they maybe able to make certain claims to rights to the 15 feet, you will need to be able to counter these assertions , most likely will require a lawyer
BK trustee did not want to deal with the potential title issues, that’s why they made a weak try at resolution with the lender but did not push the issue,