Lenders foreclosing on the wrong property happens more often than you think.  In fact, I wrote a blog entry about the case of a local woman who returned home to find her house padlocked when a major mortgage lender seized her home in error.

Funny story, I’ve been looking to either rent or buy a place to mess around with a classic muscle car I’m restoring and answered an ad by a guy who owns a quarter-acre parcel with a small two-bay garage on it.  It seemed perfect, after all, he was only asking $20K and even offered to accept a small down payment and finance the balance.  I informed him that I was interested, told him what I do for a living and that I would need to do some research before I made my final decision.

So I ran the seller’s name in the county index, pulled the vesting deed.  Legal was defective; no way could I plot this thing. Even went two or three deeds back, same thing.  Then I ran the mortgages and discovered that the guy has a $70,000.00 HELOC (which is supposedly against his primary residence). The face page of the mortgage reflects the correct address, but the attached legal description is for--yep, you guessed it--the property he wanted to sell to me.

I called the seller the next day and explained to him what I had found and that this would need to be corrected before he could sell the property (or at least before I would buy it).   First words out of his mouth: “hmmm, with these banks getting bailouts and screwing people over, I wonder if I can find a way to turn this to my advantage…” Or something to that effect.  Although I didn’t articulate it, I’m thinking, “yeah, pal, and if you’re willing to cheat someone who's trusting you with up to $70K of their money, you won’t think twice about doing the same thing to me!”

Needless to say, I passed on the deal.

Regards,
Scott Perry