Bank Foreclosure Process on Foreclosed Property Omitted Some Property from Property Records

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“I got a call from a lawyer in New Jersey and he advised me that my grandfather had a piece of land that was foreclosed on. The trouble is that a small tract (10′ by 115′) was not included. This lawyer wants us to sign a quit claim deed so he can settle this matter. I asked him what they were offering for this piece of land and he said they weren’t offering anything that they thought this land belonged to them any way. I said, as a lawyer I was sure he would not advise anybody to just give away any piece of land. He told me they would go to court and get this land anyway. I said that it seemed to me that if they were going to go to court to get this piece of land put in his client’s hands that it would be easier to just pay my sister and three brothers the amount of a court action for this land. I have since then received another letter that states they would like to avoid doing a costly court action. I wondered what a court action to get a piece of land that was not on the deed settled and do you think this is a fair way to settle this matter. This whole matter is holding up the sale (already sold) of the other land because of a defective title.”

[NOTE: Articles and answers on DearEsq., while written and published by lawyers, do not constitute legal advice, and no attorney-client relationship is formed by your reading of this information. You should always consult with an attorney for any legal situations.]

The attorney is probably correct to say that they could go to court and have the defective paperwork reformed, provided that they otherwise have all of the evidence they need to demonstrate that the omission of the property was due to a clerical error.

Why shouldn’t they pay you the same amount as it would cost them to take you to court is a reasonable question. On the other hand, why should you profit from someone else’s mistake, when absent the mistake you would have stood to receive no money at all is another reasonable question.

Only you can decide if and how you want to push this, however, you should be aware that in some states, if all of the facts are indeed on their side, and if they need to take you to court to correct the error, you could end up being ordered to pay for their attorneys fees and court costs for having forced them to take you to court to correct something which was as a matter of law theirs in the first place.

You should consult with a property attorney in both your state and New Jersey to determine exactly what your rights and responsibilities are in this situation.

Recommended reading:

Big Money in Real Estate Foreclosures

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Author: Anne P. Mitchell, Esq.

Anne P. Mitchell, Esq. is a noted family law expert, Internet law expert, and Professor of Law at Lincoln Law School of San Jose. She is the author of "Surviving Divorce: the Single Father's Guide" and "The Email Deliverability Handbook"

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