Real Estate Law
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Good morning, and thanks for contacting JUST ANSWER.. If I understand your facts correctly, the foreclosure of the first mortgage was commenced in 2007, and and took until 2013 to complete through a Sheriff sale at which you purchased the property. In most states where judicial foreclosures are held, when the foreclosure suit is filed, it is considered to be lis pendens notice to all persons who might wish to acquire an interest in that property. Thus the rights of anyone who takes an interest in the property after the foreclosure suit is started are cut off by the foreclosure action. The HOA foreclosure action became subject to the the first mortgage foreclosure action, and would generally be cut off, i.e. ineffective against a Sheriff's deed to you issued via the foreclosure action. Whether or not a title insurance company would insure your title under these circumstances. They should, but they are very cautious and they might require you to bring a quiet title suit against both the HOA and the 2010 purchaser. If it makes you feel any better though, you should definitely have the upper hand in the QT Action.
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Who has been in possession of the home since 2007? Ws the foreclosure you bought a first mortgage? did you consultwith either an attorney or a title company before bidding last Thursday?
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From the limited information that I have about your situation, and just from a theoretical standpoint, assuming the first mortgage foreclosure is valid, you should prevail in any lawsuit brought by the second purchaser. There are numerous factors that may play into that situation, such as all of the events that may have taken place with the first mortgage lender over the nine-year period between the suit being filed and the Sheriff sale last week. That's just one. Foreclosure sales are risky ventures, first mortgage or otherwise. Purchasing from an HOA foreclosure buyer, without obtaining title insurance as buyer number two did, is virtually insane. I'd say the odds are that you will be involved in all some kind of a lawsuit with buyer number two. At the very least, win or lose (probably win) you will have legal expense in protecting your position.
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