Legal Question in Real Estate Law in California
Title insurance
My wife and I live in california and had all of our retirement funds invested in real estate (1) rental home and (1) primary resident as the market conditions were fine. however with the colapse of the market and with job losses we were in trouble. I had to let the rental propety go back to the bank and want to keep the primary residence now that we have income again to meet our financial obligations. I have not made a payment on our primary residence in 14 months and want to do a work out option with the bank , which I do not see a problem with them helping giving the current market conditions. Question, For the last 6 months the escrow and title company has been calling me to resign the deed of trust as they have recored the deed and grant deed with the wrong leagl desciption vesting us to lots 1 -14 (the whole block) Instead of just lot 5. When I call the bank they keep postponing the forclosure. Is the bank having a hard time foreclosing due to a title defect making the loan non enforceable? Is this a title or escrow error. Do I have to take the time off of work to go and resign. They are getting very fustrated that we have not came back to resign, it has been almost 2 years since we bought the house. Do we need a Lawyer?
1 Answer from Attorneys
Re: Title insurance
I'm really sorry to hear about your difficulties, which are getting all too typical these days.
You really need to bear down on the possible work-out with your bank or the current holder of the obligation, using your current hopefully adequate income as the principal leverage.
I think there likely is a connection between the improper vesting and the lack of any foreclosure so far; it is tempting to suggest telling the bank you will remove that problem for them in the same escrow in which they rewrite your loan. They might call your bluff and go ahead and foreclose in court, including a cause of action for judicial correction of the deed error, which they could probably establish to the court's satisfaction.
As to whether the error can be blamed on the escrow or the title function, I'm not sure, because in most of California (but not south of the Tehachapis, I understand), the title and escrow services are performed by the same company. My guess is that it is an escrow function.
As to taking time off work, the bank can probably send a notary to your home if it is just a matter of signing, but you really should find a way to take time off to negotiate with the person or people at the bank who have the current authority to cut a work-out or loan-restructure deal with you.
As to whether you need a lawyer or not, having the right lawyer on tap for consultation or to sit in on a negotiation with you could be quite useful. Expect lawyers with problem-loan experience to be very busy these days.