I believe our land doesn't have a clear title....

[Zellie]

We purchased a double-wide trailer, one acre of land along with several outbuildings (garage, guest house, potting shed, etc) from our neighbor (who happens to be my step-aunt/uncle) for $50,000 last November. My mother and step-father own the land next to theirs. My aunt/uncle (not overly close with them) wanted to move to another state to be near family as they are in poor health. We felt the land was a good deal, especially since it adjoins ours. Because we were family, they agreed to not charge us any interest. We agreed to pay them 1,000 a month. Additionally, there was a verbal agreement that they would install a storm shelter. They had applied for a government refund on storm shelters and been approved for this address. The storm shelter is 4,000 up front with a reimbursement of 3,000. We agreed to pay the 1,000 that wouldn't be reimbursed.

We did not do a title search on the property since prior to their purchase, it had been owned by my mother/step-father for many years (and before that my grandparents, etc). There didn't seem to be anything to search. We signed a mortgage and Bond for Title.

In February, we received some money - enough to pay it all off. We sent a note asking to go ahead and close. A week later, my step-father called to tell me that actually our land was somehow tangled up in their mortgage. He said he was trying to straighten it out but it would take time.

It finally straightened out last week. However, my step-aunt has stated that she wants us to pay for both the mortgage and the storm shelter (and she would send us 3,000 after she received the refund). However, we can't afford both. I asked their attorney why I couldn't pay for the storm shelter, send them 40,000 and then make payments for about 4 more months until it was paid off? He said that I couldn't do that. When I asked why, he said it would mess up the taxes. When I said that didn't make sense, he told me that to get the land out of the bank mortgage, they had to put it in my name. If it doesn't get settled/signed within 60 days it reverts back.

My question is, if the land was in my mother/step-fathers mortgage by accident, why does the bank care what's done with it? If it's not my mother/step-fathers land (it was my aunt/uncles), then it shouldn't be in there, period. It has me worried that my step-aunt/uncle knew all along it was in the mortgage. But maybe there is some other way?

I realize that I need an attorney, however, my oldest daughter has medical problems and is currently going through some significant seizure and behavioral problems. I have doctors and testing for two weeks solid before I can hunt for an attorney. Their attorney says that I must close by the end of the month. Since I've signed nothing further, I'm not doing anything other than making my montly payments that we agreed upon.

I'm just looking for any thoughts or opinions as to what may be going on. Thanks in advance and we're in Alabama if that makes a difference.

 

[Bgood2me]

Attention, I am not an expert. After reading this though I feel comfortable to say that I think that you should call their Attorney again and ask, "What has to be done to put the land in my name? How can I pay this off?"

It may be that your stepdad took out a second mortgage out on the property that you are wanting to purchase. It may be more money then what you are offering to pay it off.

Call that Attorney back.

I am sorry about your daughters health problems. I understand that it must be hard to handle any other issues because your daughter is most important of all. Good luck!

Hopefully this will get a "Senior" to reply.

Keep us posted.

 

[LdiJ]

We purchased a double-wide trailer, one acre of land along with several outbuildings (garage, guest house, potting shed, etc) from our neighbor (who happens to be my step-aunt/uncle) for $50,000 last November. My mother and step-father own the land next to theirs. My aunt/uncle (not overly close with them) wanted to move to another state to be near family as they are in poor health. We felt the land was a good deal, especially since it adjoins ours. Because we were family, they agreed to not charge us any interest. We agreed to pay them 1,000 a month. Additionally, there was a verbal agreement that they would install a storm shelter. They had applied for a government refund on storm shelters and been approved for this address. The storm shelter is 4,000 up front with a reimbursement of 3,000. We agreed to pay the 1,000 that wouldn't be reimbursed.

We did not do a title search on the property since prior to their purchase, it had been owned by my mother/step-father for many years (and before that my grandparents, etc). There didn't seem to be anything to search. We signed a mortgage and Bond for Title.

In February, we received some money - enough to pay it all off. We sent a note asking to go ahead and close. A week later, my step-father called to tell me that actually our land was somehow tangled up in their mortgage. He said he was trying to straighten it out but it would take time.

It finally straightened out last week. However, my step-aunt has stated that she wants us to pay for both the mortgage and the storm shelter (and she would send us 3,000 after she received the refund). However, we can't afford both. I asked their attorney why I couldn't pay for the storm shelter, send them 40,000 and then make payments for about 4 more months until it was paid off? He said that I couldn't do that. When I asked why, he said it would mess up the taxes. When I said that didn't make sense, he told me that to get the land out of the bank mortgage, they had to put it in my name. If it doesn't get settled/signed within 60 days it reverts back.

My question is, if the land was in my mother/step-fathers mortgage by accident, why does the bank care what's done with it? If it's not my mother/step-fathers land (it was my aunt/uncles), then it shouldn't be in there, period. It has me worried that my step-aunt/uncle knew all along it was in the mortgage. But maybe there is some other way?

I realize that I need an attorney, however, my oldest daughter has medical problems and is currently going through some significant seizure and behavioral problems. I have doctors and testing for two weeks solid before I can hunt for an attorney. Their attorney says that I must close by the end of the month. Since I've signed nothing further, I'm not doing anything other than making my montly payments that we agreed upon.

I'm just looking for any thoughts or opinions as to what may be going on. Thanks in advance and we're in Alabama if that makes a difference.

You do understand that you may lose the land (the opportunity to purchase it) if you do not close by the end of the month? Is the storm shelter important enough that you do not want the land without it?

 

[nextwife]

Rule number one of buying real estate:

Don't buy property from ANYONE (including your onw mom) without a CURRENT, UP TO DATE title report, and preferably, title insurance. The majority of lay people have no clue what would or would not affect real estate they own.

Have you NOW recieved evidence of good title? Copies of any applicable payoffs?

 

[Zellie]

Bgood2me – thanks for your kind words. At the moment, I want to simply stop everything (except my monthly payments) until an attorney looks over the title and anything else to make sure there are no problems. I do plan to call their attorney but at the moment I’m not sure what to say other than I’m not signing until my attorney looks it over.

LdiJ – Honestly, no, I don’t understand that I might lose the land. (I suppose that’s why I need a lawyer to sort things at this point). We signed back in November. We would have finished paying it off in 2016. If we chose to pay it off early, that’s our choice – not theirs. I have kept up with the monthly payments throughout all of this. The only way I can see losing the land is if the land (that I was told had no liens or mortgages on it but somehow did) goes back into the mortgage in which case they sold it fraudulently. I can see where I might be out the money I’ve put in (about 6,000) and have to move due to their bad behavior, not mine. Is that what you are referring to?

My thoughts are that if they have been behaving fraudulently, it makes sense to slow down and have a lawyer (of my choice) look over things before giving the rest of the money. We had our attorneys look things over in November and they said it all sounded fine (other than their suggestion of doing a title search, which my Dad also suggested and which I didn’t do). I don’t want to use those particular lawyers again for personal reasons (they are my in laws lawyers and I’d rather not get my wrist slapped just yet for not heeding their advice).

Nextwife – No, I have received nothing. I have been told they will give it to me when I bring a certified check for the rest of the mortgage. And yes, lesson is learned. I may have been wrong on this one too, but the sellers were supposed to provide title insurance but they said that wasn’t provided until the final closing (which was tentatively scheduled for 2016).

 

[nextwife]

I would not allow a SELLER a penny until they PROVED themselves capable of delivering good title. Earnest money to a third party escrow until then? Yes, but purchase dollars directly into the hands of someone who MAYBE has good title and maybe doesn't? No way.

What does your contract state as to when they must deliver evidence of marketable title?

 

[Zellie]

It says that I will receive everything once the property is paid for. I know I was foolish to trust them and honestly I'm just sick over it. I really am. But they had repeatedly assured us that there were no loans or mortgages on the land. I'm scared that if I give them the money now that something else will come up later that we could have prevented. But, I don't want to rush it and I truly can't rush it for at least two weeks.

I've decided that I'm going to email my aunt tonight and simply ask her what is going on. She has refused to discuss it but I know she really wants to finish closing. She used to work in a real estate office doing house closings, and she assured me every step of the way that she knew what should be done and wouldn't steer us wrong.

I'm also going to call the attorney and just tell him that I'm getting a lawyer which will put us even further behind in regards to our money.

 

[LdiJ]

It says that I will receive everything once the property is paid for. I know I was foolish to trust them and honestly I'm just sick over it. I really am. But they had repeatedly assured us that there were no loans or mortgages on the land. I'm scared that if I give them the money now that something else will come up later that we could have prevented. But, I don't want to rush it and I truly can't rush it for at least two weeks.

I've decided that I'm going to email my aunt tonight and simply ask her what is going on. She has refused to discuss it but I know she really wants to finish closing. She used to work in a real estate office doing house closings, and she assured me every step of the way that she knew what should be done and wouldn't steer us wrong.

I'm also going to call the attorney and just tell him that I'm getting a lawyer which will put us even further behind in regards to our money.

If I understood you correctly, its not your aunt and uncle that are causing the problem, its your mother and stepfather's mortgage that somehow had the land tied into it, before THEY sold it to your aunt and uncle. I doubt that anyone behaved fraudulently. In my opinion this is a case of land that has been in the family, where title was passing around and mortgages were being obtained, and somehow your current parcel got included in a mortgage where it should not have been included.

I agree with Nextwife that you need clear title, or you shouldn't do the deal, but it may be that in order to get clear title there is a deadline with your mother and stepfather's mortgage company. I also think that you should be asking your mother and stepfather more questions. Your aunt and uncle may be equally innocent bystanders to the problem. In fact, they most likely are. They probably were just as casual about title protection as you were since they were buying family land.

 

[nextwife]

If I understood you correctly, its not your aunt and uncle that are causing the problem, its your mother and stepfather's mortgage that somehow had the land tied into it, before THEY sold it to your aunt and uncle. I doubt that anyone behaved fraudulently. In my opinion this is a case of land that has been in the family, where title was passing around and mortgages were being obtained, and somehow your current parcel got included in a mortgage where it should not have been included.

I agree with Nextwife that you need clear title, or you shouldn't do the deal, but it may be that in order to get clear title there is a deadline with your mother and stepfather's mortgage company. I also think that you should be asking your mother and stepfather more questions. Your aunt and uncle may be equally innocent bystanders to the problem. In fact, they most likely are. They probably were just as casual about title protection as you were since they were buying family land.

If funds are needed to clear title, there should be a title report, a properly PREPARED closing statment with payoffs, and all funds disbursed through a third party closing agent.

Who goes to closing, hands the seller a check DIRECTLY and leaves it to THEM tgo pay off any liens? People close through third party closing agents for everyone's protection.

 

[Zellie]

I see your point. And that does make sense. So my (hypothetical) scenario is basically that if I don't buy it within the deadline - then it legally reverts back to Wells-Fargo due to Step-Dad (I doubt my mom was involved because she chooses to look the other way when step-dad does weird stuff) never filing it properly. I can't imagine my aunt/uncle would worry about title protection when getting the land from mom/step-dad. They bought it for "$10 dollars and other considerations". I'll give them the benefit of the doubt for now. (Although I still plan to get a clear title).

I'll try one more time to talk with their lawyer (who is also my mother/step-dad's lawyer). We still have to work out the storm shelter issue but maybe if they realize we simply don't have the money to do both they will give in a bit. (And yes, the storm shelter is a must - we live in a trailer - I'd rather survive the next ten years until we move again). I think the only reason they asked was because they believe we have access to more money than we actually have.

 

[LdiJ]

If funds are needed to clear title, there should be a title report, a properly PREPARED closing statment with payoffs, and all funds disbursed through a third party closing agent.

Who goes to closing, hands the seller a check DIRECTLY and leaves it to THEM tgo pay off any liens? People close through third party closing agents for everyone's protection.[/QUOTE]

Of course they do when its done properly. However, clearly that isn't the case in this instance.

 

[Zellie]

If funds are needed to clear title, there should be a title report, a properly PREPARED closing statment with payoffs, and all funds disbursed through a third party closing agent.

Who goes to closing, hands the seller a check DIRECTLY and leaves it to THEM tgo pay off any liens? People close through third party closing agents for everyone's protection.

Should I ask for that paperwork prior to closing? How do I know if property has a clear title at time of purchase?

 

[LdiJ]

Should I ask for that paperwork prior to closing? How do I know if property has a clear title at time of purchase?

By closing via a title company and purchasing title insurance.

 

[Zellie]

Just as an update, I spoke with their attorney today. He seemed to be very agreeable and said that the title is completely cleared now. He said there was confusion at the bank, but the title is clear and currently in step aunt/uncle's name. I asked why he had said that we had to close in 60 days and he said that all of that was straightened out now, we could close whenever we were all in agreement.

The problem now is the storm shelter. It was ordered by them when they lived here after tornados destroyed a lot of homes on our road (which included damage to mine). Due to a gov't program, they will receive reimbursement for the storm shelter (which is due to arrive any day now). The attorney is concerned that if we sign prior to the storm shelter arriving and the refund, then the reimbursement might not go through. He said that we should probably wait to close until it's completely finished.

He wants me to pay for everything and they will sign over the property when the storm shelter is finished.

I proposed that (after viewing proof that the title is clear) I send $10,000 to my aunt/uncle, pay for the storm shelter (which will be deducted from my balance) and make double payments until the storm shelter is finished. At the time the refund comes through, we close and I pay the rest and receive the title.

I also asked that the actual closing paperwork be done by another attorney who wouldn't be representing either of us. (Which he was fine with).

I'm waiting to hear back after he contacts my aunt/uncle.

 

[nextwife]

Just as an update, I spoke with their attorney today. He seemed to be very agreeable and said that the title is completely cleared now. He said there was confusion at the bank, but the title is clear and currently in step aunt/uncle's name. I asked why he had said that we had to close in 60 days and he said that all of that was straightened out now, we could close whenever we were all in agreement.

The problem now is the storm shelter. It was ordered by them when they lived here after tornados destroyed a lot of homes on our road (which included damage to mine). Due to a gov't program, they will receive reimbursement for the storm shelter (which is due to arrive any day now). The attorney is concerned that if we sign prior to the storm shelter arriving and the refund, then the reimbursement might not go through. He said that we should probably wait to close until it's completely finished.

He wants me to pay for everything and they will sign over the property when the storm shelter is finished.

I proposed that (after viewing proof that the title is clear) I send $10,000 to my aunt/uncle, pay for the storm shelter (which will be deducted from my balance) and make double payments until the storm shelter is finished. At the time the refund comes through, we close and I pay the rest and receive the title.

I also asked that the actual closing paperwork be done by another attorney who wouldn't be representing either of us. (Which he was fine with).

I'm waiting to hear back after he contacts my aunt/uncle.

Ask him to provide you evidence of good title. Or that you will get good title through the closing process. Get all agreements in writing.