Use Of Rubber Check To Pay Off Home Seller's Mortgage Leaves Buyer Facing Foreclosure On Prior Owner's Loan; Title Insurer Steps In To Defend
- Tom Bloomer lives in a quiet, suburban community in Kingsland and said he purchased his house in May 2008. But now, Bloomer said he's found out some information about his home that has him upset. "I stumbled across the fact that my house was on a foreclosure list and is scheduled to be sold on April 6," Bloomer said.
- Bloomer said he has paid his mortgage payments consistently to his lender, Bank of America, and he was surprised to see that Wells Fargo Bank has filed foreclosure against him. "I've talked to the attorneys for Wells Fargo and they say they have rights to the house," said Bloomer. Bloomer is asking 'how could this be?'
- He was told the person who sold him the house almost two years ago gave Wells Fargo a worthless check(1) and now the bank is foreclosing to collect that debt. [...] Attorney Kevin Yackel said the foreclosure is temporarily on hold. "Bloomer was not provided proper notice as required by Georgia law," he said.
- Yackel also said the [title insurance] underwriter is now pursuing a defense to keep Bloomer in his home. Yackel said Stewart Title has presented the documents from the sale/purchase to show that this is a wrongful
foreclosure.(2)
For the story, see Kingsland Man Facing Wrongful Foreclosure; Seller Closed with Worthless Check.
(1) It was probably the agent who handled the title closing for the sale who sent Wells Fargo the hot check.
(2) When purchasing a title insurance policy when buying a home, not only does the insurance company agree to indemnify you in the event the title is defective (up to the face amount of the policy), it also agrees to defend you when your title is subjected to a challenge from another party claiming to hold a competing interest in the property (as in this story), and also agrees to pick up the tab for the legal fees and costs associated with such a defense.
(For those prospective real estate purchasers who choose to work with real estate agents in their search for a property, and you want to "test" the agents to see if they know what they are doing, ask them whether you need title insurance in the event you "pay cash" for the home. Every once in a while, you'll come across a "genius" who'll tell you that if you don't need financing to buy the home, you can get away without having to buy title insurance, thereby saving the cost of the premium, thereby reducing your closing costs. If you come across an agent who tells you this, do yourself a favor and get rid of him/her and find someone else. And keep this story in mind when doing so!)
<< Home