QUESTION: My wife and I owned a home in Broward County from 1995 to 2002, when we sold it to a young couple. We completed the deal at a title agency that has since closed. The home now is in foreclosure. The lender found that our sale deed had been improperly recorded in 2002 and has contacted my wife and me to sign a corrected deed so that the foreclosure process can continue. Is this common, and is there any risk for us to sign?
ANSWER: This kind of thing doesn’t happen all the time, but it’s not unheard of, either. It’s probably best if you sign - but only after you determine this isn’t a scam.
The process of foreclosure involves more than just taking the property back from the borrower. The lender also needs to make sure that any other ownership and title issues are resolved so that it can sell the property to recoup the money. When the bank files the foreclosure action, it also will sue all other parties who have stakes in the home - such as judgment holders, recent spouses, condominium associations - to clear out their interests and take clean title back.
With something like this, the lender will make a claim against its title insurance policy, and the insurer’s attorneys will work to clear up the issue. When you sold the property, you signed a warranty deed to the buyers. The “warranty“ means that you promised to do what is necessary to assist in cleaning up any errors or problems with the transfer.
It would be simpler for you to cooperate rather than have the lender sue you over a property you no longer own. But call the lender or check with your attorney to make sure it’s legitimate.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter GarySingerLaw.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.