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What must happen to complete a home purchase when a 2nd mortgage was not properly notified & must go through foreclosure again?

West Palm Beach, FL |

I had an offer accepted on a house. The "owner" had bought the house cash on the courthouse steps. Five days prior to close the title co. found that the 2nd mortgage holder was not properly notified & the "owner" did not have clear title. I was told this must go throught foreclosure again. The original bank no longer exists, they served papers to someone they thought was the agent of record. His lawyer states he is not. The loan was sold to another bank that has now become a third bank. No one can find record of the loan. The lawyers have been working on this since the end of March. At some point can they declare the paperwork lost? how much longer will this likely take? I love this house & it is an excellent price if I can ever get it. I want to understand the process. Thanks!

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Attorney answers 2


The owner who bought the house is in a mess, he needs to get rid of the second mortgage in order to clear title. It may take a while so your probably best walking away and finding something else.

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The lawyers have been working on clearing the title since March, How long is "a while" realistically speaking?


The owner can sell you the property, but he remains obligated to satisfy the second mortgage as it was not extinguished by the foreclosure and he remaisn repsonsible. This is not a title defect, but rather an encumbrance which can be removed for cash. If you have a contract to purchase, the seller remains obligated to sell to you (unless the contract specifically dictates otherwise in express terms) and satisfy the mortgage from your closing proceeds. In other words, you can enforce the ocntract should you choose to do so. I suggest you seek out the services of a lawyer in Palm Beach County to review your contract.



If he must satisfy this obligation then why did the mortgage broker and title company act as if the deal was dead. He was willing to place money in escrow equal to the amount of the second mortgage until it was straightened out but I could not get the loan to go through like this (FHA).

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