HELP-Refi on home w/lein from old owner

[davbar1997]

PLEASE:
Would appreciate any/some advice, please! We are in the middle of a refi. loan- Our current is an 2/1 ARM, up 11/15/07. We are currently working with a good group of people to get a fixed rate. All has been going well until today. I am not sure if this is a problem or not. We purchased the home in great condition from the bank at full asking price. However, today the bank that we are trying to get refinanced by called and said a Mr. Joe B-------- was still on the title for $34,000.00!!!!!!! How could this happen? Is this a big deal to get him off? He was the former home owner before the house was forclosed on him by the bank. I need to ge the lein off our title so refinancing will go smoothly. I do not understand how the first bank we financied this house with could have sold it to another bank(Sell the loan terms) if the title had an old lien. If we tried tobreak out of our 2/1 ARM we would have been charged BIG money - So, we had to wait until the 24 months was up to refinance at a better rate. Does anyone knoe anything about this? My husband thinks we just have to "update" the names on the title. ADVISE???
PLEASE????? Many Thanks........................;)

[TommyOH]

I'm assuming you have title insurance? I would call the title company and tell them that there is a lien on the title stopping you from refinancing. They can either clear it up or pay the lien. That's what title insurance is for.

[davbar1997]

How did the forclosure bank sell it to us without a clear title?
Second HOW do you think that the bank that first had our ARM "sold it" to another bank without having a clean title???
Yes, when we purchased the home 11/12/05 we did buy Texas Title Ins.
So...you think I can stop worrying - this will not be our problem.


Thanks for any advice.

[DougBenn]

How did the forclosure bank sell it to us without a clear title?
Second HOW do you think that the bank that first had our ARM "sold it" to another bank without having a clean title???
Yes, when we purchased the home 11/12/05 we did buy Texas Title Ins.
So...you think I can stop worrying - this will not be our problem.


Thanks for any advice.
Bank buy sell mortgages all the time. If I understand correctly this probably a second. The banks can sell their first position to another bank. They sold you their first position but your title company should informed you that their is a second mortgage. The title company should either say clean title or list the encumberances on the title that need to be cleared. If they missed it then it goes to what TommyOH said.