Expert: Connie Wildasinn-Broker,GRI,Realtor® - 7/17/2011

Question
QUESTION: Are realtor covered by insurance for knowingly defrauding a home buyer re a mortgage that was not paid off on a quit claim house?I was given copies of cancelled check,but the back check was a different check.I am now facing foreclosure.I know the realtor has filed bankruptcy.

ANSWER: Hi Sherry,

There is not enough information in your query to make a well informed decision.  But here are some general statements on a few of your key points:

Quit claim of a home title does not relieve the mortgage obligation.

Cancelled checks are not proof of payment to a mortgage.

Fraud is never covered on insurance...

The rest of your question is not really understandable, my suggestion is you seek the advise of an attorney...good luck

---------- FOLLOW-UP ----------

QUESTION: HI Connie
Thank you for such a quick response.When you say quit claim does not relieve the mortgage debt, to me or to him?He owns his own real estate co. in Ca.and I believe he is also a broker.I moved to Ok after a relationship breakup.The realtor was a friend of my ex's.He was paid $30,000 to handle the buying of my house.He had it in his name and I have a letter signed by him saying that I had already given him over $100'000 and I had 49% in the property and in about 6 months (after the mortgage was paid off) it would be quit claimed to me.6 months later he sent me a copy of the cancelled check with the loan # on the check and the property was quit claimed over to me.Several years pass and I am served a notice of foreclosure.I turned this into the FBI, but the bank is going ahead with the foreclosure and I do not feel very confident in the way my lawyer is handling this.I am out of money and afraid I am going to end up homeless.What should I do?

Answer
Hi Sherry,

The quit claim does not remove any one from the original promissory note, only payoff of the debt or foreclosure will remove any one from the debt.

Again,there are legal issue here that require a lawyer, but you should have received a reconveyance from the mortgage lender if indeed the 'note' was paid in full.  Other wise it may not have been paid in full, and still have a balance due.... Have you contacted the bank to see what is still owed, back interest and penalty?  Perhaps instead of foreclosure they would be willing to work with you?

Not sure if the FBI was the right party to address this issue, but I would suggest the DRE (Department of Real Estate) in your state and the District Attorney in the city where the incident took place.

Worst case if the property does go to foreclosure, try to get relocation money from the foreclosing bank, it is called 'cash for keys'  and some banks pay up to $10,000

But do call them... see if you can work out a loan modification to keep the home if that is really what you want to do...but also check out all your available options... and keep an open mind... good luck