thunternsf, Home Owner in San Francisco, CA

Does a clouded real property title have any impact on the speed with which a lender will initiate foreclosure proceedings.?

Asked by thunternsf, San Francisco, CA Thu Jan 17, 2013

I missed two mortgage payments in 2009, so I'm at risk of foreclosure. I recently found out that during my last refi in 2004 that the reconveyance that was supposed to be submitted by the old lender once they were paid in full was never submitted; therefore, never recorded with the county. So on the title report, it looks like there is a lien held by my new mortgage lender for $570K AND a lien held by my former mortgage lender for $570. Both liens are in active status. There are two more liens on the property for equity lines of credit ($100K and $12K). This is a bit of a mess, so I was wondering if the complexities associated with the clouded title make foreclosure a less attractive option for the bank, especially since I have been paying my mortgage consistently and on time every month since the two missed payments.

Help the community by answering this question:


You might consider consulting with Mr. Woo on the related issue – which seems rampant nationwide – on whether the foreclosing lender can document (ie “prove”) its right to do so.

Real Estate Broker 00849905
Attorney ar Law
400 Montgomery 505
San Francisco CA 94104
Office: 415.781.3000
0 votes Thank Flag Link Thu Jan 17, 2013
Hi thunternsf,

Jeff Woo, is correct. Title company takes care of the cloud in this case, so bank does not worry about going forward with a foreclosure.

Douglas Lagos
Realtor, Certified HAFA Specialist (CHS)
Coldwell Banker Residential
0 votes Thank Flag Link Thu Jan 17, 2013
$1,252,000 on a house probably worth, what $500,000?

C'mon, you made this up, right?

speechless in San Francisco!
0 votes Thank Flag Link Thu Jan 17, 2013
Unfortunately, it is very unlikely that the title issues you described would make your lender reticient to foreclose. If your bank foreclosed, they would take subject only to this prior loan which was paid off. The lack of a reconvenyence dded in 2004 will be insured by the title company that did the loan, so the bank will not be concerned.

Best of luck.

Jeff Woo,Esq.
Cooper, White & Cooper LLP
Complex Rental Property Group
0 votes Thank Flag Link Thu Jan 17, 2013
Depends. If the prior liens were paid just cleared that is usually relatively easy to straighten out, and the lender can foreclose with the cloud on title if they like, and I have seen this several times. That said, I don't see them foreclosing if you have resumed payments and only behind on two. Talk with the lender
0 votes Thank Flag Link Thu Jan 17, 2013
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