Legal-Ease: Patience, title insurance pay off in the long run


LEGAL-EASE

By Lee R. Schroeder - Guest Columnist



Lee R. Schroeder

Lee R. Schroeder


The legal profession is somewhat infamous for being deliberate and what some people might call “slow” in accomplishing legal work.

Lawyers’ steady, consistent and un-rushed pace is usually intentional. When thinking, analyzing and strategizing, impatience can be much more expensive than investing extra time to do something right to begin with.

The pitfalls of undertaking business and legal transactions too quickly were very evident after the nation’s housing crisis took hold, beginning about a decade ago.

From 2002 through 2007, much of the world experienced an incredibly hot real estate market. Houses would consistently increase in value, sometimes on a daily basis. Realtors, attorneys, title examiners, closing agents and appraisers were busier than ever.

Once a potential homeowner found a house that was desired, the pressure was on everyone to complete all the paperwork as soon as possible so the property’s increases in value could be captured by the new homeowner. During that time, because of the hectic pace, some details got missed, some important tasks were completed improperly and many other mistakes were made.

By 2008, the housing bubble began to burst. As real estate prices fell, people’s incomes also fell, and many people’s homes fell into foreclosure. As banks attempted to at least recoup the properties that their loans purchased, the bankers found many of the mistakes that were made years before when the money was first loaned.

Sometimes, mortgages were never recorded at the courthouse. In other instances, the names and addresses on the recorded documents were completely inaccurate. Some documents were omitted altogether. Almost every mistake you could imagine had been experienced by someone.

In one instance in metropolitan Toledo, a homeowner owned a house on one lot with an adjoining vacant lot that served as a yard. When the homeowner refinanced his mortgage, the mortgage only described the vacant yard lot, not the house. When the homeowner quit making mortgage payments in 2008, the bank foreclosed. The homeowner then claimed that his home was not encumbered by a mortgage at all. And, technically, the homeowner was right.

I was hired to help the bank fix the mistake created by a rushed closing agent years before. My investigation uncovered that the homeowner’s septic system was located on the vacant yard lot. The homeowner’s attempts to be devious were foiled when the homeowner was sued for trespass based upon his sewage entering onto the vacant yard lot that the bank had by then recovered through foreclosure. I also sought a judgment lien and its foreclosure in order to finally put the bank in the same financial position it had expected to be in years before.

When the loan was originally taken out, the bank had wisely secured title insurance and therefore did not have to pay my legal fees. However, the bank was nonetheless inconvenienced and lost two years waiting for its money.

Mistakes happen, especially when people hurry. I therefore encourage clients to be diligent and patient in their transactions and purchase title insurance whenever possible.

Lee R. Schroeder
https://www.limaohio.com/wp-content/uploads/sites/54/2017/04/web1_Schroeder-Lee-RGB-8.jpgLee R. Schroeder
LEGAL-EASE

By Lee R. Schroeder

Guest Columnist

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.

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