Legal Question in Real Estate Law in Kentucky

Sellers used my property as collateral on their mortgage

Purchased land in November of 1997, clouded title not known until July 2000. Filed suit and won damages based on General Warranty Deed. In efforts to collect damage looked at liens on sellers remaining property and found two Mortgages filed in July and August of 1998 that contained descriptions of property we purchased in 1997. One is from a bank the second from a private party. In other words these people put up our property as collateral for their first and second mortgages. What can I do?


Asked on 7/23/02, 11:20 am

1 Answer from Attorneys
Philip Owens Philip M. Owens, Attorney at Law

Re: Sellers used my property as collateral on their mortgage

I am assuming that your deed was recorded immediately upon your purchase. Contact the mortgage holders and inform them of the problem. Include the recording data and a copy of your deed with the recording data. If your deed was recorded before the mortgages were recorded then the mortgages must be released. If they do not release them you will have to bring suit against the mortgage holder and the person using the property as collateral. If your deed was not recorded at the time the mortgages were filed then the problem gets more complicated. The mortgage holders then become "good faith purchasers" and they would not be accountable to you and could cause problems. You need to go back to your attorney and begin again.

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Answered on 7/23/02, 6:58 pm


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