As a result of the economic downturn and its effect on real estate, real estate investors and other property owners may be at risk of owning unmarketable properties. This may be a huge problem for those who own real estate secured by a mortgage which is unenforceable due to the expiration of the statute of limitation.
The statute of limitation for a mortgage foreclosure action is 5 years, and that time period begins to run from the date of the default.
In many instances, lenders have not enforced their rights by filing foreclosure lawsuits in a timely manner. Either the lender never filed a lawsuit, or the lender filed too late, resulting in a lawsuit subject to dismissal on the grounds that it is time barred.
The dismissal of a lawsuit (or the fact that one was not filed at all) is great for the property owner, but the result is an unsatisfied mortgage that remains recorded in the county’s official records.
With such an unsatisfied mortgage (and one which will not be satisfied upon closing of a subsequent sale), it may be nearly impossible to get title insurance.
If you find yourself in this situation, contact us. We have helped real estate investors gain marketable title by working to remove exceptions from title insurance policies. The options available to you depend on the specific nature of your issues. Explain to us what the problem is, and we will help you determine the best option for you.