10+ Years After Buying Their Homes From The City (& Making Mortgage & Tax Payments), At Least 17 Homeowners Discover That Title To Properties Belongs To HUD

In Las Vegas, New Mexico, KOB-TV Channel 4 reports:

• After more than a decade of paying their mortgages and property taxes, at least 17 homeowners in the city of Las Vegas, New Mexico still don’t have the titles to their homes.
  
  Reynaldo Maestas hoped the city would resolve the issue by paying him his mortgage this March. The city hasn’t come to an agreement. Maestas is still fighting for the home.
  
  A declaration of trust between U.S. Department of Housing and Urban Development and the City of Las Vegas reveals at least 17 homes weren’t supposed to be sold in the first place. The properties still belong to the federal government.
  
  When Maestas bought his Las Vegas home, he purchased title insurance. However, the title company failed to disclose the property encumbrance.
  
  "This is why we bought the insurance,” Maestas said. “This is why when you have your mortgage and you're closing; you get the title insurance."
  
  4 Investigates discovered that former New Mexico Region III Housing Director Vincent “Smiley” Gallegos sold the homes through Housing Enterprises Inc. in the early 2000s. Housing Enterprises Inc. and Region III are now defunct. Gallegos was indicted for fraud but pleaded no contest in 2013. He served one year of probation.
  
  "It's just sickening,” Maestas said. “It's really sickening. I still have that home there with an active mortgage. There are people who have just walked away and declared bankruptcy."
  
  Maestas is suing the City of Las Vegas for allowing the sale.
  
  During a Las Vegas City Council meeting last week, councilors ruled it was too early to agree on a settlement with Maestas.
  
  "They've already admitted that there was wrongdoing and they need to clear this up,” Maestas said. “They need to finish what was started a long time ago."
  
  Attorney Geno Zamora has recently been hired to represent the City of Las Vegas in this case. He told 4 Investigates he cannot comment on pending litigation. At this time, it’s not clear if or when Maestas will get his money back.
  
  4 Investigates reached out to HUD to see if the federal government will release ownership to the current homeowners. 4 Investigates is waiting for a response.

Source: Las Vegas, NM homeowners not compensated after home sale fraud.