Short sale title companies - Can a title company sign off on a short sale without approval from both lenders?

4 great comment(s) for this post

1. 

   shelly v 2:07 am 2/03 of 2010

   the title company is responsible for insuring that all liens are paided and that title company is insuring that the liens are satisfied..get an attorney and go after the title company..

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2. 

   Alterfemego 3:07 am 2/03 of 2010

   You need to go back to the (HUD1 Statement) specifically. You need to see if both loans were accounted for on this statement. If not, you owe the lender the money. If they were, then you need to go back to Chicago Title and have them explain why both weren’t paid off. In some cases a second loan if a HELOC loan is an unsecured loan, meaning you promised to pay, but if you lose the collateral (the house), then you are still responsible for paying it back unless you are able to negotiate a deal with the lender.

   I am in similar boat, difference is both my loans are with the same company. We are short selling and praying the lender will not only accept the offer on the table (120,000 short of mortgages) and satisfy both mortgages. Doubtful, but I’m hopeful.

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3. 

   acermill 3:54 am 2/03 of 2010

   You have a mess here. Chicago Title doesn’t insure YOU. The policy covers the new owners, so that THEY have clear title to the house which you sold to them. Consequently, if you cannot clear this up (hopefully the title firm DOES have an agreement from that second mortgage lender, and they just misplaced their copy), you will need to allow the lender to file that lien on the property, and then the new owners can use Chicago Title (or the title firm itself) to seek removal of the lien.

   In any event, contact the issuing title firm immediately, and send them copies of anything you may have received in the mail.

   Good luck.

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4. 

   Expert Realtor 4:28 am 2/03 of 2010

   Chicago title is a title insurance company and they DO NOT transfer property, record deeds, or close transactions.

   So…that is the first thing to get straight. They don’t have any authority to approve anything other than underwriting the title policy.

   Sounds like the real estate attorney that conducted the closing (or title company) didn’t request a payoff from the 2nd loan company and proceeded to close the deal. It is the closing attorney’s responsibility to make sure that the loans were paid off so clear title could pass.

   The title insurance company underwrites policies based on the “title opinion” of the attorney…so it turns out that the attorney involved made a major error…and that is WHO YOU would sue….that is how it closed without the loan company’s approval.

   The title insurance wasn’t your policy, it was that of the new owners…that is why you are getting the bills and not them. It is your responsibility to take care of that.

   Get a real estate attorney…..there is no choice with this.

   However, the buyer’s title insurance company may remove the lien for the current owners, but that is NOT going to prevent someone from suing you in the end. The lender had a legal right to approve the short-sale before it went through.

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