Bought house... get Notice of Auction

[Eli]

So, we bought an investment property in March. Umpqua Bank is our lender, working with WFG National Title. All went well with everything.. home inspection, signed, closed, done deal. Had a tenant move into one of the two units on June 1st after doing some minor work. Slumlords, here we come!

Fast forward to today, and I get a call saying that the Sheriff dropped off a Notice of Auction. Sure as shit, the property is scheduled to be auctioned off on July 12th by the Sheriff's office. WTF? lol

The people named in the Auction are the prior, prior owners. So I guess maybe there were some nefarious things going on there that were still in process when we bought the place? I don't really have any idea, and our real estate agent was baffled and had never seen anything like this before.

I'm not really too worried I guess, this is what Title Insurance is for(?). But I'm just curious if anyone has ever gone through or heard of anything like this, and if it's going to turn into a nightmare or what.



Update 6-7:

Contacted our business attorney, who does happen to have some real estate experience. He referred us to a Real Estate attorney friend of his. They said that as long as we went through the normal process of escrow and title insurance, there shouldn't be a whole lot to worry about. He said that he was too busy to deal with this in the time frame needed, but that our regular attorney should be able to handle it without any problems. Sent him all of our paperwork etc.

Went to the Sheriff's Office. The Writ of Execution was dated January 5th 2016, so there is really no reason this shouldn't have been caught by the time we were going through the process in March. Total Judgement: $292,370.29.

The Sherriff's office took a copy of our Warranty Deed and told us to contact the attorney presiding over the auction stuff.

Contacted him. He was a complete jerk, totally uncooperative and was really no help at all.

Got a call from the Title Company assuring us not to worry and that everything would be OK. Got a call from Real Estate Agent saying they told the title company to call and reassure us that everything would be OK. LOL, so, we'll see how much water that assurance holds.

So, that's where we are. Everything appears under control... for today.

I wonder if the attorney presiding over the auction is pissed because he's not going to get paid now?

Update 6/8:

Received call from Title Company saying they were sending documentation to the court and auction Attorney to dismiss the case. Forwarded documents to our attorney as well, just in case it doesn't exactly happen like that. Think they'll really just be like "Oh well..." and write off almost 300k?

Seems to be all under control and rather anti-climactic though, so far. In this case, I'll consider that a good thing.

Update 6/13:

Talked with all involved today. This is all basically due to misfiled paperwork stemming from when the property was foreclosed in 2012. It was sold to the people we bought it from, but something happened and the foreclosure gears kept going for some reason. So it has no basis in reality I guess.

The Auction has been cancelled. We are waiting for "release paperwork" from the court to show that the case has been dismissed.

And that will be that, according to the title company. Nightmare averted.. this time? We plan on being a little more careful next time.

 

[skyking]

well that's not good at all.

 

[Newbian]

If I win the bid can we make the other unit our shack pad?

 

[tortillasoup]

I can't wait to see how this plays out.

 

[sactoking]

I can see two outcomes. Either the title was clean when the property was transferred to you, in which case whoever is trying to force auction needs to be put in their place, or the title was not clean, in which case the title insurance is going to get messy (if the auction stems from two owners back then the title insurance from two sales ago is liable.)

 

[Captante]

Wow ... what an unpleasant surprise!

Please keep up updated.

 

[Elixer]

I can see two outcomes. Either the title was clean when the property was transferred to you, in which case whoever is trying to force auction needs to be put in their place, or the title was not clean, in which case the title insurance is going to get messy (if the auction stems from two owners back then the title insurance from two sales ago is liable.)

Pretty much this, I don't see another case here.
It is the job of the title company to make sure everything is up & up, and if they screwed that up, they owe you big time for damages, and they should be reported ASAP.

 

[Capt Caveman]

Did you not have a RE lawyer perform a title search for you before closing?

 

[Eli]

I can see two outcomes. Either the title was clean when the property was transferred to you, in which case whoever is trying to force auction needs to be put in their place, or the title was not clean, in which case the title insurance is going to get messy (if the auction stems from two owners back then the title insurance from two sales ago is liable.)

Interesting, thanks. Any idea what "messy" entails? Could we actually lose the property?

Did you not have a RE lawyer perform a title search for you before closing?

Hmm.. Is that something that the potential buyer is supposed to do on their own, independent of the lending process? It's just a conventional loan. I think I do remember a few days of "waiting for the title to clear", but it wasn't from anything I had to do I don't think.

It's not like this was some shady for sale by owner transaction with no oversight or anything....:\

 

[JEDIYoda]

Did you not have a RE lawyer perform a title search for you before closing?

no clue huh.....

 

[Eli]

no clue huh.....

Admittedly, I just handed people a lot of money and signed a lot of paperwork. D: The whole process from offer to closing took like 2 weeks; we actually closed a few days early...

Our real estate agent is a good family friend with 25yrs experience. It was by all accounts a perfect textbook case of buying a property.

I'm all for it being a learning experience if that's what it is, but I don't think I did anything wrong here?

 

[JEDIYoda]

Admittedly, I just handed people a lot of money and signed a lot of paperwork. The whole process from offer to closing took like 2 weeks; we actually closed a few days early...

Our real estate agent is a good family friend with 25yrs experience. It was by all accounts a perfect textbook case of buying a property.

I'm all for it being a learning experience if that's what it is, but I don't think I did anything wrong here?

Actually Caveman had no clue!! The people you worked with to get all the paperwork signed are the ones on the hook! You did nothing wrong!!

 

[John Connor]

 

[dr150]

Shit, it's like buying a used car that you find later was in a wreck and wasn't declared in the title work.

To your point, OP, you have title Insurance to cover any shenanigans. You should also check with a lawyer to make sure you're covered for contingencies. I'm sure your State has lemon laws to undo your purchase?

 

[Eli]

Yeah, will lawyer up if necessary. We'll find out more tomorrow.

So in hindsight, I'll admit that there were some funny things about it all, but it was all to be handled by the bank and such - I wasn't supposed to worry.

The place was agent owned. Our real estate agent had never come across another agent so clueless, she did constantly comment on this. They bought it from the prior owners in November 2015, so just 4 months before us. The owner/agent was very quick to accept our offer; our agent was a little surprised.. with the insane market here in Portland. But we weren't complaining.

So I'm guessing the prior, prior owners stopped paying the mortgage, and managed to sell it to the folks we bought it from in the mean time.. who managed to sell it to us in the mean-mean time, all while the foreclosure process was happening in the background? Either that or it's some kind of mistake; they never paid their last payment and the foreclosure wheels automatically began to turn or something?

I do note that the 2nd prior owner and the people we bought it from are both Asian, which of course could be a complete coincidence. But it does make me wonder if perhaps they know each other or are related...

Maybe the sale in November 2015 was the shady for sale by owner transaction with no oversight... lol

 

[FelixDeCat]

This sounds interesting. I bid $1, but can go as high as $1.50.

Let me know when I win.

 

[FelixDeCat]

Call the bank and title company and fax them over a copy of auction notice. Keep a list of names and contact dates/times for future reference.

 

[Fanatical Meat]

Interesting, thanks. Any idea what "messy" entails? Could we actually lose the property?



Hmm.. Is that something that the potential buyer is supposed to do on their own, independent of the lending process? It's just a conventional loan. I think I do remember a few days of "waiting for the title to clear", but it wasn't from anything I had to do I don't think.

It's not like this was some shady for sale by owner transaction with no oversight or anything....:\

Property might not be yours to begin with.

 

[purbeast0]

Yeah, will lawyer up if necessary. We'll find out more tomorrow.

So in hindsight, I'll admit that there were some funny things about it all, but it was all to be handled by the bank and such - I wasn't supposed to worry.

The place was agent owned. Our real estate agent had never come across another agent so clueless, she did constantly comment on this. They bought it from the prior owners in November 2015, so just 4 months before us. The owner/agent was very quick to accept our offer; our agent was a little surprised.. with the insane market here in Portland. But we weren't complaining.

So I'm guessing the prior, prior owners stopped paying the mortgage, and managed to sell it to the folks we bought it from in the mean time.. who managed to sell it to us in the mean-mean time, all while the foreclosure process was happening in the background? Either that or it's some kind of mistake; they never paid their last payment and the foreclosure wheels automatically began to turn or something?

I do note that the 2nd prior owner and the people we bought it from are both Asian, which of course could be a complete coincidence. But it does make me wonder if perhaps they know each other or are related...

Maybe the sale in November 2015 was the shady for sale by owner transaction with no oversight... lol

lol wtf?

 

[boomerang]

Yeah, will lawyer up if necessary.

I'd not put off finding an attorney. Title Insurance is virtually worthless. It is a discovery process based on public records. Anything not discovered is fair game. TI is a racket that should have been reformed many moons ago.

You're dealing with a government entity with all the bloat and bureaucracy working against you. The process is in place and slowing and halting that process is going to take effort from people who like collecting paychecks for the least amount of effort.

IMO it's already a nightmare, you are just not aware of the intensity yet.

 

[Eli]

lol wtf?

Yeah, I know. Probably would have been best to leave that thought untyped. Cuz, you know, all you Asians are in cahoots.

Doesn't really have anything to do with them being Asian, it was just an observation. I've heard of stuff like that happening before.. Sell a place to your brothers first cousin in an attempt to thwart/prolong the foreclosure process...

I'd not put off finding an attorney. Title Insurance is virtually worthless. It is a discovery process based on public records. Anything not discovered is fair game. TI is a racket that should have been reformed many moons ago.

You're dealing with a government entity with all the bloat and bureaucracy working against you. The process is in place and slowing and halting that process is going to take effort from people who like collecting paychecks for the least amount of effort.

IMO it's already a nightmare, you are just not aware of the intensity yet.

I guess we have about a month to figure out the real intensity eh? Will do. I expect that our bank will probably work pretty feverishly to clear this up. Will definitely report what we hear back today.

 

[boomerang]

I guess we have about a month to figure out the real intensity eh? Will do. I expect that our bank will probably work pretty feverishly to clear this up. Will definitely report what we hear back today.

Yeah, the bank has got a huge interest in this too. This is just one of those things that you probably don't want to keep rationalizing to yourself that, well tomorrow, I'm supposed to hear back from so and so and we'll know more then. That day by day stuff quickly turns into weeks. Go with your gut. If you feel it's going sideways on you, get a professional involved.

 

[sdifox]

Before any title transfer can occur, a search is performed on the title to see if there is any lean or claims on it. All outstanding fines and stuff are supposed to be paid off before money is transferred from lawyer to seller.

your title insurance should take care of that. Though I question your county's competency when they don't even have current owner name.

They also do search on the buyer and seller. And if your name is deemed similar enough so some unsavoury character you have to sign afrodavit to say you are not that person.

 

[PricklyPete]

Sucks dude. Hopefully TI cleans it up.

 

[Dr. Zaus]

Yeah, I know. Probably would have been best to leave that thought untyped. Cuz, you know, all you Asians are in cahoots.

Doesn't really have anything to do with them being Asian, it was just an observation. I've heard of stuff like that happening before.. Sell a place to your brothers first cousin in an attempt to thwart/prolong the foreclosure process...



I guess we have about a month to figure out the real intensity eh? Will do. I expect that our bank will probably work pretty feverishly to clear this up. Will definitely report what we hear back today.

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