How to Get a Clear Title for a New Home Purchase

My question involves real estate located in the State of: Oregon

My wife lost a high paying job and we hired an attorney to do a bk with home included.
The bk was discharged in June 2010. Not proud by any means but it was the right decision for us.
We have worked closely with our bank to purchase a new home and we got pre-approved, received an accepted offer, set a closing date and now the bank says they won't lend because of the judgment listed on the title report. They say that they want to lend to us but cant with that item on there.
We are still in the home because we are afraid to leave and then be sued for not maintaining it.
All we want is for the sale to happen so we can clear title and move on.
A general judgment was issued on June 18th 2013. Is there anything I can do to get the Title cleared? Is there anything the Title company can do to insure our Judgment will not affect the new purchase since it was included in the bk and they can't attempt to collect?
Thank you for any help you can provide.
Amihelpless

Clear up a couple of things.

1 - Judgment against who? You (and/or wife)? The seller?

2 - Why are you "in the house" that you haven't bought yet?

3 - Is your purchase contract "subject to obtaining financing"?

Read back over your post and try to understand why it's confusing.

Example:

Let's eat grandmother.

Let's eat, grandmother.

You can see how proper punctuation, grammar, and sentence structure can be important.

Filed bk and included our current home
Received discharge in June 2010.
Our bank just received a general judgment to foreclose.
We are still in the house.
In the last 3 years we developed a new relationship with a different bank who offered us a new mortgage for the purchase of a different house.
We made an offer that was accepted on the new house.
The preliminary title report shows a judgment against us.
Isn't it against federal law for them to include any pre-petition judgment on a title report?

How is it your are still in the home since 2010? Are you making payments?

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Quoting amihelpless

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Filed bk and included our current home
Received discharge in June 2010.
Our bank just received a general judgment to foreclose.
We are still in the house.
In the last 3 years we developed a new relationship with a different bank who offered us a new mortgage for the purchase of a different house.
We made an offer that was accepted on the new house.
The preliminary title report shows a judgment against us.
Isn't it against federal law for them to include any pre-petition judgment on a title report?

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I wouldn't think so.

The bankruptcy laws prevent lenders from attempting to collect a discharged debt.

That's not what's happening here.

The title company is simply reporting that which is already public record.

The lender doesn't want to lend because he believes that the loan might be at risk. Even if it isn't at risk, it's the lender's prerogative to believe it is and he has no obligation to take any risk at all.

You will either have to find another lender or wait until you've saved up a large enough down payment so that a lender would be willing to take the risk.

I still am confused about how a lien against one property that was discharged in bankruptcy could effect the loan on a property being newly purchased. I also am uncertain what the OP means by "general judgment to foreclose".

If what the OP is stating is that the bank holding the mortgage for the property discharged in bankruptcy somehow got a broad judgment against them that includes more than just the original property, then that would seem to be improper, based on the bankruptcy.

I suggest that the OP consult with their original bankruptcy attorney.

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Quoting llworking

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I still am confused about how a lien against one property that was discharged in bankruptcy could effect the loan on a property being newly purchased. I also am uncertain what the OP means by "general judgment to foreclose".

If what the OP is stating is that the bank holding the mortgage for the property discharged in bankruptcy somehow got a broad judgment against them that includes more than just the original property, then that would seem to be improper, based on the bankruptcy.

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Oregon allows for two types of foreclosure - judicial and non-judicial.

Judicial involves an action in court (like a lawsuit) and ultimate judgment of foreclosure.

Non-judicial requires only proper notice and a trustee sale of the property which is usually when the bank gets ownership.

If the lender goes the judicial route and gets a judgment of foreclosure, here's what the Oregon statutes say about it and I quote only the applicable parts and then provide a lien to the entire statute.

18.150 - Judgment liens in circuit courts

(1) If a judgment document filed with a court administrator under ORS 18.075 (2) includes a money award and complies with ORS 18.042 or 18.048, the court administrator shall note in the register of a circuit court that the judgment creates a judgment lien unless:

(2) Except as provided in this section, if the court administrator notes in the register that a judgment creates a judgment lien, the judgment has the following effect in the county in which the judgment is entered:

(a) When the judgment is entered, the judgment lien attaches to all real property of the judgment debtor in the county at that time; and

(b) The judgment lien attaches to all real property that the judgment debtor acquires in the county at any time after the judgment is entered and before the judgment lien expires.

Emphasis mine.

However, there is another part of the statute (that I wasn't aware of) that might give the poster some hope and should be pointed out to the lender.

(5) A judgment lien does not attach to any real property of a judgment debtor acquired after the debt giving rise to the judgment is discharged under federal bankruptcy laws. Debts are presumed to have not been discharged in bankruptcy until the judgment debtor establishes that the debt has been discharged.

Emphasis mine, again.

Here's the link:

http://www.statelawyers.com/Statutes...ID:37/ID:40378

So, it's possible that the lender's loan officer is not aware of 18.150 (5) which means that there is no judgment lien risk to the lender for the new loan on the next home.

The poster should point that out to the lender and provide documentation of the discharge of the debt (not just say it's been discharged).

However, that does not preclude the lender from declining the loan anyway.

Thank you for the very valuable info.
The lender just wants the item removed from the title report before they will lend.
I will have more info tomarrow when my realtor and I meet with the title company.
If they won't remove it ( the lien from the title report), then what?

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Quoting amihelpless

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Thank you for the very valuable info.
The lender just wants the item removed from the title report before they will lend.
I will have more info tomarrow when my realtor and I meet with the title company.
If they won't remove it ( the lien from the title report), then what?

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If the title company won't remove it and the lender won't lend, you find yourself another lender, one who is more knowledgeable about the statute.

Although it might be an issue with many lenders if many title companies want to exclude the judgment lien from coverage under the title policy.

You might have to hunt for a new title company as well as a new lender.

You might even have to wait a few years to buy another house and rent until you can do that.

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Quoting amihelpless

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Thank you for the very valuable info.
The lender just wants the item removed from the title report before they will lend.
I will have more info tomarrow when my realtor and I meet with the title company.
If they won't remove it ( the lien from the title report), then what?

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that makes no sense. What does a report on the title of your current home affect the new home?

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A general judgment was issued on June 18th 2013.

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this was a judgment for $$$ or a judgment to take title of the home? In either case, how is that a pre-BK petition judgment?

Well here's your answer:

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Our bank just received a general judgment to foreclose.

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they are taking title. Your debt was discharged in the BK but that doesn't mean you get to keep the house if you don't pay for it and presumably, you have not been making your payments. As such, they foreclosed to take possession of the property and would eventually evict you. If that is the case, there is nothing you can do about it. It is the proper action for them to take title and possession of the house if you failed to make payments.

They aren't looking for money. They just want their house. You can walk away without owing anything because of the BK. You can walk away from the house altogether because they foreclosed and have taken title so you have no attachment to the house any longer.

- - - Updated - - -

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Quoting adjusterjack

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If the title company won't remove it and the lender won't lend, you find yourself another lender, one who is more knowledgeable about the statute.

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this is not a money judgment. It is a foreclosure. It is not going to be removed from the title. It HAS to remain because it is how the lender claimed title to the property. If it was not recorded, there would be an issue in the chain of title.

there is a general misunderstanding about what a foreclosure is.

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fore·clo·sure
fôrˈklōZHər/
noun
[COLOR=#878787 !important][/COLOR]

• 1.
  the process of taking possession of a mortgaged property as a result of the mortgagor's failure to keep up mortgage payments.
  

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it may or may not deal with the associated debt; the mortgage loan