Former Lender Imposed a Lien for Property Tax After Selling the Property REO
My question involves real estate located in the State of: Florida
We bought a Bank of America REO property April 2011 from Bank of America for $187,000 cash. Stewart Title handled the closing and we received certificate of title. The former owners had declared bankruptcy prior to the foreclosure (April 2010) and the husband later died in an industrial accident. The wife is still alive. We pay our property taxes in person the day the bill comes. Everything was fine in 2013, but when I went to pay them this year in November I was told it was an FYI statement, that the escrow company was responsible for paying it. I explained we owned the property outright, no bank involved. He showed me a loan # on my tax bill and then went and pulled back records and the same loan # was on the previous owners tax bill from 2010, before the foreclosure and before BOA sold the property to us as a REO.
I called BOA and to make a long, long story short, they have encumbered my property with a lien that belongs to the former owners. They won't discuss anything with me beyond telling me it belongs to him because I can give his full name and the address of the property, but without the last 4 digits of his SSN I am unable to get ANY info, even though I bought the property and it had clear title at the time.
I have called the foreclosure attorney and they gave me as much info as they could. The loan # they foreclosed on is different than the loan # that appears on my property tax bill. I have been dealing with the Bank of America Home Loan Resolution Team since 11/3/2014 and getting absolutely nowhere. I cannot get passed the customer service rep assigned to my case, cannot get a manager or supervisor to speak to me, cannot get ANY information on the encumbrance to my property, other than it belongs to the former owner and shouldn't be there. I have contacted our county tax collector and she has written to BOA and asked for lien release. No response. Stewart Title researched the closing records and chain of title and everything is fine as far as they are concerned.
I am at a loss here. I have been in contact with BOA's resolution team weekly since the beginning of November and my last conversation with them made me want to blow a gasket- the rep told me I could apply for a lien release. Excuse me? I own the house, the lien is a debt incurred by the former owner who is now dead and attached to the property they sold me after the closing. Title company cannot/will not help because they sold me a house with clear title.
Can someone PLEASE point me in the right direction? I need help. Bad.
Michele
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
It seems possible that the prior owner had more than one mortgage.
Was the tax debt that is the subject of the lien incurred paid before or after you purchased the home? Was it paid before or after you purchased the home? If it was incurred before you purchased the home, was it in fact to be paid out of escrow?
At the end of the day, if you cannot get lien holders to dismiss their claims, there's the option of a quiet title action. But if you can get this resolved without the associated expense and delay, I would try to do so before suing.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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javajitterz
Stewart Title researched the closing records and chain of title and everything is fine as far as they are concerned.
Really?
So the title company didn't catch the fact that the taxes from 2010 were not paid?
I would be going after the title company. They insured a clear title. Let them deal with it.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
Really?
So the title company didn't catch the fact that the taxes from 2010 were not paid?
I would be going after the title company. They insured a clear title. Let them deal with it.
The lien was place after the sale. I don't think that the title company is responsible for a lien that was placed after the sale. Apparently that is what the title company has told the OP.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
Except for the fact that title companies are also supposed to do local searches where the property is located to make sure that there are not delinquent property taxes, water and sewer bills, open building permits (without CO issued), child support liens, or other assessments against the property that do not get registered at the county in 'the normal' way (meaning recorded in the books) but are in separate registers at the municipal, city government, or at the county.
A tax sale certificate or an assessment sale certificate are not recorded at the county but are a lien on the property.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
Except for the fact that title companies are also supposed to do local searches where the property is located to make sure that there are not delinquent property taxes, water bills, open building permits (without CO issued), child support liens, or other assessments against the property that do not get registered at the county in 'the normal' way (meaning recorded in the books) but are in separate registers.
I know that the title says that it is a property tax lien, but generally that kind of lien would not come from a lender, it would come directly from the taxing authority. If it was property taxes that BOA paid, that should have been dealt with within the foreclosure sale.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
I don't disagree with you. But the fact remains that the title company insured a clear title. If they didn't follow all the possibilities to insure that title, I think they are the ones that have to pay up and clear the title.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
I don't disagree with you. But the fact remains that the title company insured a clear title. If they didn't follow all the possibilities to insure that title, I think they are the ones that have to pay up and clear the title.
However, they have already said that they would NOT, because the lien came AFTER the sale. I think that this was a BOA mess up.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
Then I ask you what is title insurance? I don't care what the timeline is. Two years after a potential lien was placed on the property because of delinquent taxes, BOA is in a foreclosure, and then two years later places a lien on the property. The title insurance company did not do their due diligence in their investigation. They insured the title a year later as clear.
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However, they have already said that they would NOT, because the lien came AFTER the sale.
But the foreclosure was already in the court and the insurance company just didn't do their job. What did they insure if not a clean title at the time of the purchase? "We insure a clean title but we didn't do our due diligence so you may have a lien on the property in the future." That would make a good disclaimer.:friendly_wink:
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
Then I ask you what is title insurance? I don't care what the timeline is. Two years after a potential lien was placed on the property because of delinquent taxes, BOA is in a foreclosure, and then two years later places a lien on the property. The title insurance company did not do their due diligence in their investigation. They insured the title a year later as clear.
But the foreclosure was already in the court and the insurance company just didn't do their job. What did they insure if not a clean title at the time of the purchase? "We insure a clean title but we didn't do our due diligence so you may have a lien on the property in the future." That would make a good disclaimer.:friendly_wink:
Bud, I know you mean well but this is not what you think it is. It was BOA that put the lien on the property therefore it was not something undiscovered by the title company. Its clearly a mess up on BOA's part.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
If the bank paid the taxes before the sale, then imposed the lien after the sale, there would be absolutely no way for the title company to pick up on a problem.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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llworking
Bud, I know you mean well but this is not what you think it is. It was BOA that put the lien on the property therefore it was not something undiscovered by the title company. Its clearly a mess up on BOA's part.
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Mr. Knowitall
If the bank paid the taxes before the sale, then imposed the lien after the sale, there would be absolutely no way for the title company to pick up on a problem.
I do understand what both of you are saying but I simply disagree with you that a potential lien was not discoverable before the closing.
The property was in foreclosure and in Florida that means a judicial foreclosure. There is a court file that presumably includes all the issues related to the foreclosure. Where did BOA come up with a judgment against the escrow company for the non-payment of the taxes that allowed BOA to file the lien on the property?
I think it is undisputable that OP did not get a clear title.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
What magic trick do you believe would allow a title company to detect that the bank had paid the taxes, and might file a lien at some point in the future after the title history had been run and after the sale was closed?
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
A local search at the municipal level would have shown when and who paid the taxes. This would have been in or about late 2010 when OP contracted with the insurance company. They would have seen that an escrow company was paying the taxes up until 2010 at which time or earlier , the payments stopped. Taxes go into arrears as does the mortgage payments. BOA commenced a foreclosure. Now we have a court record of the proceedings associated with the specific property.
The foreclosure and tax delinquency are two separate issues but BOA has to clear up the taxes to be able to sell the property after foreclosure. Can we agree on that?
All of this that took place before the closing is discoverable. If the title company did their research 4 months before the closing and didn't check just prior then they might not have known. But that is their problem. They issued a clear title at closing.
I would still like to know where the judgment for the lien came from and when the judgment was issued.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
A local search at the municipal level would have shown when and who paid the taxes. This would have been in or about late 2010 when OP contracted with the insurance company. They would have seen that an escrow company was paying the taxes up until 2010 at which time or earlier , the payments stopped. Taxes go into arrears as does the mortgage payments. BOA commenced a foreclosure. Now we have a court record of the proceedings associated with the specific property.
The foreclosure and tax delinquency are two separate issues but BOA has to clear up the taxes to be able to sell the property after foreclosure. Can we agree on that?
All of this that took place before the closing is discoverable. If the title company did their research 4 months before the closing and didn't check just prior then they might not have known. But that is their problem. They issued a clear title at closing.
I would still like to know where the judgment for the lien came from and when the judgment was issued.
The OP has made it clear that the lien came from BOA. It is also not the responsibility of a title company to search for organizations that might place a lien on a property at some point in the future, because, of course, once a property is no longer owned by a debtor, a lien cannot be placed against that property for that debt. This is clearly an error on the part of BOA.
Re: Former Lender Imposed a Lien for Property Tax After Selling the Property REO
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budwad
A local search at the municipal level would have shown when and who paid the taxes.
And how do you propose that the identity of the person or entity that paid the taxes would indicate that there's a potential cloud on the title? People routinely escrow their taxes and have them paid by their mortgage lender or servicer.
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Quoting budwad
The foreclosure and tax delinquency are two separate issues but BOA has to clear up the taxes to be able to sell the property after foreclosure. Can we agree on that?
The issue under debate is not whether the bank made a mistake and should fix things, as would appear to be the case. It's the fantasy that this would fall under title insurance. That said, if the bank wants to sell property REO with an outstanding tax liability, it is free to do so.
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Quoting budwad
If the title company did their research 4 months before the closing and didn't check just prior then they might not have known. But that is their problem. They issued a clear title at closing.
Because the title was clear at closing.
Even if I bought into the view that the title company had to investigate who paid the property taxes, and then follow up with them to find out if they were reimbursed if it were anybody but the title owner, it would be ludicrous to suggest that they had to do so over and over and over right up to the moment of closing "just in case" something new happened. Had a tax debt been discovered and had the bank agreed to pay it off prior to closing, it would be reasonable to expect that the payoff would be verified; but we're speaking of a situation in which there was neither a tax debt that could have been discovered nor a lien resulting from its payoff.