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I had a Bankruptcy discharged over two years ago and at that time I gave my home back in the chapter 7 when the payments were cu

Mooresville, NC |
Filed under: Chapter 7 bankruptcy

rrent. I never got anything from the mortgage company saying that they were foreclosing because it was included in the bankruptcy. I recently found out that the attorney for the mortgage company did not record the deed at the court house until 18 months after the discharge which of course I knew nothing about until now. My question is do I have any means of legal action against this kind of foot dragging on recording a deed 18 months after the fact. I am trying to get a home loan and have waited the required two years after a BK for a VA loan only to be told now because the attorney for the mortgage company took so long to record it at the court house I have to wait another 18 months on top of the two years. It doesn't seem fair nor legal. Any help would be appreciated

Attorney Answers 3

Posted

Fair? No. Legal? Yes. I am not aware of any legal remedy available to you. There is no law requiring mortgage companies to promptly foreclose and the problem you describe is fairly common.

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Posted

The real problem is that the attorney does not have a duty to you to record the deed. The attorney has a duty to his client and his client could sue for any damages due to his slow recording.

As for your situation, I don't know of a remedy unless you had an agreement and this was a breach of the agreement. (To be clear, I have never seen such an agreement that would allow you to sue under this kind of theory - but it could exist).

Good luck.

If you live in Arizona, please contact me for actual advice; this is just speculation. It certainly is not legal advice. I don't have enough information to give actual legal advice. I can only take the limited information presented and provide a idea of what you might do and how it may turn out.

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2 comments

Derek R. Caldwell

Derek R. Caldwell

Posted

As I am sure Mr. Webster is aware, but many lay people are not aware, that it is becoming increasingly common for mortgage creditors to go through the foreclosure process and then not file the Trustee's deed or whatever paperwork actually takes the property out of the debtor's name and transfers it to their name until such time as they have found a purchaser for the property. This is a sneaky way of avoiding liability for taxes and HOA dues or personal injuries that more and more companies are adopting. Unfortunately, there is no easy way to stop them from doing this.

James Portman Webster

James Portman Webster

Posted

Wow. I have not had any clients make such a claim, but I can see this being a possibility. Thanks for the information.

Posted

I don't know of a legal cause of action that can be brought in your situation. However, I wonder what the date on the deed itself is. If the deed is dated approximately 18 months ago, perhaps the underwriters for your new loan will understand the facts better and still approve you. The deed should have a date on it when it was signed and that date is sometimes different than the recording date.

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