Recently-Recorded, Forged Mystery Lien Threatens To Kibosh Short Sale Of Home Facing Imminent F'closure; Title Agents Refuse To Insure Over Dirty Deed

In Elk Grove, California, KXTV-TV Channel 10 reports:

• The pending sale of a home on the brink of foreclosure could collapse because of a fraudulent deed of trust recorded on the property-- and no one involved in the transaction can imagine a possible motive.

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• [Homeowner JT] Tiumalu's Realtor found a buyer and got approval from both the first and second mortgage holders to close escrow by the end of December. But this week, a preliminary title report showed a mysterious new $26,500 deed of trust that was recorded on Oct. 13.

• The phony deed of trust puts the house in Alameda County, the signatures of the homeowners are forged, and the notary stamp appears to be counterfeit. Although the document is clearly fraudulent, it's enough to cloud the title and kill the sale.

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• Realtor Megan Laherrere, who was negotiating the short sale with the lenders for Montoya, said a quiet title action could take months and cost thousands of dollars in legal fees. "We contacted title and their bonds will not cover removing it. The title insurance won't cover it. Nobody wants to touch it," Laherrere said.

For more, see Mystery lien could torpedo Elk Grove home sale.