Property Ownership by Adverse Possession

[Double Edge]

Interesting way to clean up the foreclosure debacle. Texas man attempts to claim ownership of a $300K house for $16 under Adverse Possession Laws. (Did not sound like it was a done deal yet, just an uncontested deal by those who might have standing, thus far..) Guess we have those in Oklahoma too, though it appears to be mostly used to claim adjacent property by moving boundary markers.

Forget the headline racist aspect, I don't see that as overt motivation from the neighbors based on the story.

[Achilleslastand]

Ive saw this on another forum. Pretty smart man if you ask me.

[Double Edge]

Yep.

[BBatesokc]

I know nothing of how the law applies in these instances, but even if the mortgage company went out of business, wouldn't the mortgage still have been sold to yet another mortgage company. Its not like if your mortgage company goes out of business all their customers get free homes. I'm confused.

[betts]

Of course, I would assume one then has to be able to afford property taxes. Would one be liable for back property taxes if unpaid, or any liens that are associated with the house?

[Double Edge]

One would assume taxes for sure, I don't think those ever get forgiven. I can't say the same about liens. There are number of ways those seem to get wiped during legal proceedings or through loop holes.

[MadMonk]

If the neighbors want him out of there, why don't they find out who holds the mortgage now? It would be up to them to re-claim the property.

[Pete]

even if the mortgage company went out of business, wouldn't the mortgage still have been sold to yet another mortgage company.

Absolutely it would. Something would become of the assets even in the case of bankruptcy on the part of the mortgage company.

I think the hitch here is that these properties sit vacant for a long time but someone would have to squat for three continuous years and no matter how slow the process, it's not going to take three years for that property to be sorted out. It's simply worth too much and was used to secure a mortgage -- a mortgage that some lending institution owns.

This guy may be able to squat for a while, but I doubt very seriously he'll ever get title to that property.

[BBatesokc]

Where I see this working (if it could ever work at all) is a piece of property that was owned by an out of state absentee land owner.

[Double Edge]

Where I see this working (if it could ever work at all) is a piece of property that was owned by an out of state absentee land owner.

That likely covers the current financial entity who has a stake in this situation.


The former lender kicked out the borrower, took possession of the property and then went broke. The ownership documents are probably in a package of assets in some limbo state, perhaps waiting for a judgement to creditors on the bankrupt company, perhaps abandoned completely if the bankrupt company just closed their doors without creditors (unlikely) or perhaps the assets have been picked up by another company who have yet to get on top of managing what they have. When properties are not moving, are declining in value while taxes and other expenses are still rolling, owning them may not always be a good thing.

Properties do get abandoned and eventually taken over by the government for taxes. This person may have stepped in at the right moment, inserted himself in position to benefit from that and keep it from happening. But I doubt it. Someone will eventually come knocking to reclaim it.

[bluedogok]

The way that mortgages were bundles and traded as financial instruments it is likely that tens of thousands of mortgages are in some sort of limbo state. Based off many articles out there the chain of title has been broken on many of these properties, a friend who does that for a living has already run across that some in his work.

[Double Edge]

Looks like some of the fakery is still going on too.

(AP)

Mortgage industry employees are still signing documents they haven't read and using fake signatures more than eight months after big banks and mortgage companies promised to stop the illegal practices that led to a nationwide halt of home foreclosures.

County officials in at least three states say they have received thousands of mortgage documents with questionable signatures since last fall, suggesting that the practices, known collectively as "robo-signing," remain widespread in the industry.

http://www.cbsnews.com/stories/2011/...20080533.shtml

[Midtowner]

Absolutely it would. Something would become of the assets even in the case of bankruptcy on the part of the mortgage company.

I think the hitch here is that these properties sit vacant for a long time but someone would have to squat for three continuous years and no matter how slow the process, it's not going to take three years for that property to be sorted out. It's simply worth too much and was used to secure a mortgage -- a mortgage that some lending institution owns.

This guy may be able to squat for a while, but I doubt very seriously he'll ever get title to that property.

That doesn't necessarily mean that the mortgagee is going to have an action in foreclosure available to them. Different states have different rules. I don't know about what Texas' rule is. But the mortgagee in some places can be barred by adverse possession against the mortgagee or just by a statute of limitations. Property law is some arcane stuff.

As for getting title to the property, if he just filed and won a quiet title action by adverse possession, he actually does have title to the property. The mortgagee can still maintain a foreclosure action, but that might eventually be barred by the statute of limitations (but I don't know anything about Texas law).