Welcome to The Home Equity Theft Reporter, a blog dedicated to informing the consumer public and the legal profession about Home Equity Theft issues. This blog will consist of information describing the various forms of Home Equity Theft and links to news reports & other informational sources from throughout the country about the victims of Home Equity Theft and what government authorities and others are doing about it.
Wednesday, August 08, 2012
Deed Recorded For Only 73 Minutes Before Being 'Erased' By Clerk Enough To Provide Constructive Notice; Subsequent Buyer, Lender Left Holding The Bag
In Tallahassee, Florida, The Associated Press reports:
A Florida appellate court on Thursday said electronic property records are official once they are filed even if later erased by mistake.
A three-judge panel of the 1st District Court of Appeal upheld the foreclosure by First City Bank of Florida on a Walton County lot that had been sold to two different buyers by Bluewater Real Estate Investments LLC.
The panel unanimously rejected an appeal by Michael and Bonnie Mayfield and Branch Banking and Trust Co. The Mayfields bought the lot in 2009 through a mortgage from BB&T.
They were unaware the lot had been purchased three years earlier by another buyer, Wright and Associates of Northwest Florida, which obtained a mortgage from First City.
The couple didn't know about the first sale because the county court clerk's office removed the record to fix an error but failed to re-record the corrected version. First City foreclosed when the first buyer defaulted.
District Judge Clayton Roberts wrote that the panel recognized "the harshness of the result" because the Mayfields and BB&T are "innocent parties."
Roberts though noted courts have consistently ruled that Florida law says once a document is filed that serves as "constructive notice" to all parties although this is the first case of its kind involving electronic rather than paper public records.
The document on the 2006 sale was in the electronic record for only 73 minutes on July 6, 2006. That was the only time a member of the general public could have discovered it, but that makes no difference, the court ruled.
Roberts concluded the opinion by writing the only remedy for the Mayfields and BB&T may be to sue the clerk who made the mistake.(1)
(1) Presumably, the Mayfields and BB&T each had title insurance policy protection, in which case it's the title insurer that issued the policies that's left holding the bag by having to indemnify each party for their loss, as well as having already provided and paid for the legal battle in court (ie. attorneys fees, etc.).
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The New York Times: The Housing Trap (In the wake of the housing crisis, low-income families have turned to seller financing to buy homes but these deals can be a money trap)
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The NY Times: Arbitration Everywhere, Stacking the Deck of Justice(Part 1 in series examining how clauses buried in tens of millions of contracts have deprived Americans of one of their most fundamental constitutional rights: their day in court)
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Justice Deceived: How Large Foreclosure Firms Subvert State Regulations Protecting Homeowners
MFY Legal Services Report On Questionable Practices By Process Servers In Debt Collection Cases
Justice Disserved: A Preliminary Analysis of the Exceptionally
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Mortgage Mess Redux: Robo-Signers Return (A Reuters investigation finds that many banks are still employing the controversial foreclosure practices that sparked a major outcry last year)
CNN Video: As Foreclosures Mount, Florida Court Turns To 'Rocket Docket'
The Wall Street Journal: A Florida Court's 'Rocket Docket' Blasts Through Foreclosure Cases (2 Questions, 15 Seconds, 45 Days to Get Out; 'What's to Talk About?' Says a Judge)
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ABC Video: Fighting Against Foreclosure (Some homeowners have found a new tactic to keep the banks at bay)
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