Legal Question in Real Estate Law in Washington
In mid Feb 2010, my 80 year old mother in Washington State got an escrow check back from her 1st mortgage company saying that her mortgage had been paid off. (She is two years into a 30 year loan.) Her lender had been one of the ones that had failed and was absorbed by a very big national bank. She called the new bank and they couldn�t tell her anything other than someone had paid off her mortgage. Then a couple of weeks later, someone from the title company showed up at the doorstep and said she was being evicted because of foreclosure by the very big bank that is in 2nd position. I called this lender and they said her account was in collections. They didn�t know anything about a foreclosure sale.
I checked the public records and it appears that the trustee for her second bank, by mistake, retroactively filed a Trustee Deed in late Sept 2009 saying the sale took place in mid April 2009, some five months earlier. Then apparently, a few months later in December 2009, the 2nd bank paid off the 1st bank.
My mom made complete payments to the 1st, on time, through February 2010 and has not received that money back from the 1st except for the small check she got for �escrow� refund in Feb 2010.) The 2nd had her in an agreed upon �forbearance� pending a loan modification.
I called the 2nd bank, entered the account number and the call automatically went to the collections department, and they don�t seem to be aware of the alleged sale.
Now that a Trustee Deed has been filed, how do we correct that?
Since the 2nd improperly paid off the 1st, what happens now?
1 Answer from Attorneys
This sounds like a real mess that needs to be sorted through some more to get to the bottom of what happened that led to the second paying off the first. That said, what I'm about to write is very basic and frankly, I think your mother is going to need to hire counsel to help her sort this out.
What she ought to do is first sort out what happened with the second. If they will not re-write her a new mortgage for what used to be a first and second, then she will have to decide if she wants to fight in court to keep her home. I cannot understand how a sale was held in April 2009 without notice to your mother and how the bank would have waited this long to do anything about it. That affects my advice on what to do next.
Let's assume for a moment that they in fact did hold a sale on the second's foreclosure. If notice was not made or if they did so even though they granted your mother a forbearance, then I would file suit to have a court sort this out and immediately after filing suit, file what is known as a lis pendens with the county recorder's office so that the bank will effectively be precluded from selling the property.
A word of caution. Before filing suit and a lis pendens, you are going to want to make darn sure that you have a solid case and your ducks in a row. Hence my suggestion that you have an attorney look into this for you to sort it all out because it seems to me that something is just amiss here, although it could be that the second mortgage holder really screwed this up royally and your mother is entitled to some relief here.
Ultimately, you first really need to sort out what is happening with the second that led to your arrival at where you are now and then figure out your options.
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