I purchased a home 6/3/06 from this couple and on 6/14/06 they closed on a home improvement loan on the same property that I purchased from them. I called the title company and they stated that because my sale was not recorded yet on the books there is nothing to be done about it. What options do I have?
The laws and customs vary widely from state to state. In some states a notice is recorded so that the lender would have known had they done a title search. In some states the recording statutes are referred to as "race" statutes ... a race to the recording office. Whoever records first wins. If you closed on the 3rd it would seem that your deed had to be recorded before (or certainly should have been recorded before) the home equity line. That might mean you are protected. Clearly the seller knew they had sold the house before the home equity (improvement) line was closed so it appears that they defrauded their lender. Consult with a real estate attorney right of way to address the matter. Your real estate lawyer should also be able to clarify what the rights of each party are. If there was a recording issue the attorney that handled your closing should help you address what happened. Did he or she not follow through on a timely basis? The seller's lender should be notified as they will pursue the seller as well.
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