Posted by Tom Brown on August 23, 2006 at 08:17:31:
The deeds were recorded in numerical order–Party 2 then Party 3. They were recorded about 4 months apart.
I agree that Party 2 owns the house. I just wanted to make sure that there wasn’t something that I was overlooking in this situation.
The only way that I can think of to do this deal is to go to the 2nd lienholder (both the 1st and 2nd liens were originated prior to Party 1 selling the house two times) and offering to buy the note, finish the foreclosure, and get title to the property that way. That would erase the problem.
Posted by Tom Brown on August 22, 2006 at 11:14:43:
Party 1 sells 4 rental houses (house 1, house 2, house 3, house 4) to Party 2. Party 1 finances the purchase for Party 2. Party 2 then quit claims house 1, house2, and house 3 back to Party 1. Party 1 sells house 4 to Party 3. Party 1 finances the purchase for Party 3.
Who owns house 4?
What is the status of the financing agreement between Party 1 and Party 3?
Posted by River City on August 22, 2006 at 12:39:25:
Party 1 sold all four houses to party 2, however, party 2 quit claimed houses 1,2,3 to party 1. Party 2 still owns house 4.
The status of the financing agreement stays in place, unless another written agreement replaced it. A quit claim transfers title and does not relieve a debt.
Posted by Tom Brown on August 22, 2006 at 12:55:38:
Look again. Party 1 sold/financed the house to Party 2.
PARTY 1 then sold/financed the house to party 3. The debt that Party 3 owes Party 1 from the sale was originated AFTER Party 1 sold the house to Party 2.
Posted by River City on August 24, 2006 at 12:47:24:
Party 1 committed fraud when he/she sold the house to Party 3 because Party 1 had already sold the house to Party 2 and only Party 2 could “legally” sell it. Party 1 should be in jail. It doesn’t matter which documents were recorded first. Hopefully, Party 3 purchased title insurance.
In addition, since Party 1 committed fraud and sold property he/she no longer owned, the financing between Parties 1 and 3 would be VOID. The financing agreement between Parties 1 and 2 would be in tact. However, if I were Parties 2 and 3, I would get a good lawyer and take Party 1 to the cleaners. I believe this would be considered a felony.
Posted by Tom Brown on August 24, 2006 at 15:18:51:
Party 3 is looking for an attorney. She been unable to find one locally. She can’t crack the small town fraternity and find someone willing to take the case.