Expert: Dick Dennis - 3/16/2010

Question
Hello -

Here is our background. Husband and I bought the home in 2002 using our bank as our lender. In 2005 we refinanced with a different lender. In 2006 we applied for a refinance again with the original bank. But this time the bank told us last minute that we did not qualify with me on the new loan because I was not working at the time. So we refinanced with just him. Here is where it gets messy. It is now 2010 we have lost our restaurant and are having a great deal of financial problems. In lieu of our problems we filed for a modification with the bank. We are now five months behind in our mortgage and the bank is just giving us the runaround about the modification saying it is still in the works.

And now here is where it gets even messier! We received a letter from an attorney that represented the title company at the time of the 2006 refi. It said that the bank was making a claim against the title company for the amount of our mortgage. The title company's lawyer is claiming that there was a lost deed of trust that never was filed with the courts and that they needed us to go ahead and fill out an amended deed of trust so that they could file it with the courts. I questioned the timing of all this and went to the courthouse myself and found that a deed of trust was indeed recorded. I felt maybe it was just a misunderstanding. So I had a layer fax it to the title company’s lawyer. A month later we received two packages, one addressed to myself, and the other to my husband. They were sent to us by a different lawyer, a much bigger, cut throat attorneys office. In the package was a copy of the original deed of trust that has my husbands name, married man only and a copy of a new amended deed that has both of our names as borrowers. They are claiming they need to resolve a missing interest issue in a recorded deed of trust pertaining to the loan obtained by my husband. My attorney did a title search and it looks as though the title company made a mistake. I am shown on title as having half interest in the property, but not having an obligation to the mortgage, deed of trust. So here is what we know so far- my husband is responsible for a mortgage. Our bank cannot foreclose on us because it shows me as having half interest of title. The bank is going after Title Company. I never signed a quit claim. We acted in good faith; we both were on the loan application and on the appraisal. We were not trying to pull a fast one. With that said, my husband signed the security instrument-deed of trust, which I believe states he is the only one who is has ownership/interest in the property.

So what are our rights? Do I have a claim? Should we play hardball? I am afraid that if I sign this amended deed of trust the bank will just foreclose on us anyway. The attorney we are talking to is really not sure what to think of this and is doing his homework.  I just need some sound advice. Any advice will be much appreciated. Oh and by the way I have the paid, satisfied note from 2006 in my possession.

Answer
Since you did not say in which state you are located, Jennifer, I believe you should hire a REAL ESTATE attorney, one that is very familiar with the foreclosure process to play hardball with the other attorneys since they are certainly playing hardball with you.

If the title company made a mistake, hey, there might be the possibility of you coming away with a free and clear house out of this if you have a very knowledgeable attorney working for you. You should not sign ANYTHING until the attorney that is going to work for you in this matter advises you. Some time ago, a title company made a mistake on my transaction and had to pay me $20,000. So, I do know that title companies DO MAKE MISTAKES. I do wish you well.

Dick Dennis
CA Broker lic #00349415
dixiedee13@aol.com