What can you do if the previous owners of your house refinanced the same day you put in an offer to buy and their loan was not recorded until 3 months later and now you have a lien that is not yours?

Answer 1

Legally, the owner's were not supposed to list their home for sale and then refinance. There is a question regarding this somewhere tied into the mortgage application. I would consult a real estate title attorney for assistance in this matter. When you purchased the home, you should have have title work done with a title insurance policy. If you paid cash for the house and you chose not to get this, then you are probably in a world of hurt and will need to sue the previous owners for the money. Assuming you took out a mortgage, you would have a title insurance policy issued. The policy would have required the title company to ensure that the property was free of any encumberances at closing. If the seller took out a mortgage that was not recorded until after the sale, the title insurance policy should pay the lien and then seek damages from the previous owner. If the previous owner was aware that they had a mortgage - which I am sure is the case, then he can also be charged with fraud and even could serve prison time for the offense. I would start by calling the title company where you closed on the house and ask them to get you a copy of the title insurance policy and then call the title policy holder and and explain the situation.