Expert: Dick Dennis - 4/4/2010

Question
My grandfather and his former wife owned a single family home jointly. My Grandfather passed away back in the early 90's leaving behind his ex wife, their children and grandchildren(he also had children from a previous marriage that I am a part of#.
His most recent ex wife wanted to sell the property three years ago which she successfully did. Usually there would have to be a probate first because my grandfather had children before he married my grandmother and we were entitled to a portion of his estate. His most recent wife also divorced him before he passed away over 15 years ago. They were both joint owners of the property and as sated above his ownership was placed in an estate in his name after he passed away.
To make a long story short, at the time of the sell 3 years ago, the title company provided title insurance making an exception on the title policy that the buyer and seller agreed to take the property through probate in a reasonable time frame after the closing.

I don't know how,but the buyer's bank provided a mortgage on the property with the above exception using the real estate as collateral.

Well the proceeds from the sale were not distributed to my grandfather's entire family and of course his first wife's children#my grandmother) did not know about the sell of this property until some time later. The title company went out of business shortly after the sell when the real estate market crumbled. The seller, which was his ex-wife also recently passed away last year.

As of today, because the property never went through probate the property is still in the estate of my grandfather and now also the estate of his ex wife because as stated above, she passed away last year.  

The buyer of the property defaulted on the loan a couple of years ago, but it appears that the bank can not obtain a foreclose judgement because technically the sale was not legitimate because there was never a probate hearing.
Now that I've explained what's going on, my question is this:
Is there a process that my family can go through to cancel the mortgage or clean the title of the buyer's mortgage since the sell never went through the probate process and technically wasn't legit??
As of today, the property still remains in the estate of my grandfather and his ex wife??? Or if this can not be done what options do we have at this point since the title insurance policy clearly states that the estate/probate was an exception on the title insurance policy?

I've since spoken with the buyer and he is still living in the property with essentially no mortgage payments because he realized later that the bank has not and can not get a judgement to foreclose, because technically he never owned the property.
The buyer advised that he got into trouble a couple of years ago when he found out he could not sale the property because it was still in the estate of my grandfather and my grandfather's ex wife. Once we all found out about this, there was no way my family were agreeing to go through probate at that time when they never received any proceeds from the sale 3 years ago from my grandfather's ex wife.

I know that generally the title company would have to take care of this but with the exception on the title insurance policy I don't really know what my family's options are.

The state of this incident was in the state of Florida. Thanks for any assistance you can provide!

Answer
Indeed quite a mess, Jay. And it all started when the property failed to go through probate and the title company refused to insure it . . . as it turned out. But why the bank lent money on a sale that basically didn't happen is beyond me. This is a case for SUPER ATTORNEY!  Bring this mess to a REAL ESTATE and/or an ESTATE attorney. He/she will straighten it out and I am sure there will be big money coming to you and/or your family from this. There are a couple deep pockets in this mess. And I am sure the attorney would take it on a contingency basis because he/she knows this is a no lose case for him/her. Just recite what you have offered above. The attorney will start to drool before you finish the story. I do wish you well.

Dick Dennis
dixiedee13@aol.com