Having clear title is critical to the sale or refinance of any real property in New York. Issues with the title can be an impediment to a real estate transaction and lead to other problems, such as preventing the buyers from obtaining title insurance on the property. Under the Real Property Actions and Proceedings Law (RPAPL § 1501), there is a legal remedy known as a quiet title action that is designed to clear up title on a piece of property. Because of the strict procedural rules involved in such claims, having the advice and guidance of an experienced real estate litigation attorney is essential.
What is a quiet title action?
An action to quiet title is a lawsuit filed to establish ownership of real property when there are potential conflicts between multiple parties who have some claim or interest to a property. By establishing a clear owner to the property, it is possible to “quiet” claims arising from unclear transfers of the property that have occurred in the past. This is especially important if the owner intends to sell or refinance the home in the near future.
A quiet title action is also referred to as a lawsuit to remove a cloud -- any claim or potential claim to full or partial ownership of the property. Title is said to be clouded if the claimant may need to defend his or her full ownership of the property against another party in the future. Ultimately, the plaintiff in a quiet title action is seeking a court order preventing the respondent from making any future claims against the property.
Filing a Quiet Title Action in New York
A quiet title claim can be filed in civil court by the homeowner or any party with a valid interest in the property. Notice must be served on any other party or parties with an ownership claim. Often, however, no one will appear in court to respond, especially in claims involving older defects. In this situation, the judge will likely issue a ruling in the claimant’s favor clearing the title defect. If the respondent contests the action, the claimant must be able to demonstrate a legitimate claim to the property, such as by documenting that he or she is currently occupying it. The claimant must also prove that he or she had taken possession of the property in good faith and was not aware of other potential claims to ownership. If the court determines the claim is valid, the claimant is recognized as the legal and proper owner of the property.
Grounds for Filing a Quiet Title Action
There are a number of situations that may require the filing of a quiet title action. Boundary and easement disputes are common, for example and can typically be resolved through a quiet title claim. Moreover, if you purchase a piece of property that was foreclosed on, any lingering title defects can be resolved through a quiet title action. Similarly, inheriting property purchased from a deceased person’s estate may involve title issues if potential heirs subsequently assert a claim to the property. Another common reason for seeking a quiet title action is to clear up any potential lingering problems arising from a property transfer through the use of a quitclaim deed. In a quitclaim deed, the previous owner relinquishes all claims to the property, but does not guarantee that the title is completely clear. A quiet title action provides the new owner with security that the title is clear and the property can be used in any manner permitted by law. Under these and other circumstances, a quiet title action is an effective mechanism for clearing title to the property.
In New York State, thousands of homeowners have been victimized by loan modification companies, “foreclosure specialists,” investors, and loan auditors who falsely claim to be experts and guarantee to save a person’s home. It is therefore imperative that homeowners learn to distinguish between the many home foreclosure rescue scams and legitimate, experienced attorneys well versed in the various applicable legal strategies to save a homeowner’s distressed property.
Self-proclaimed experts claim to possess unique knowledge and skill that’s beyond the comprehension of attorneys and judges that practice foreclosure law daily in courts throughout New York State. By promising “free and clear title,” mandatory principal reductions and even criminal prosecution of bank officials, these con artists manipulate vulnerable homeowners to seize control of their home. Inevitably, the victimized homeowner loses thousands of dollars and the loss of his home. The following is a description of the most common home rescue scams.
Short sale scam
A short sale scam involves deceptive practices where individuals or companies exploit the short sale process for their gain, typically at the expense of distressed homeowners. In a legitimate short sale, a homeowner sells their property for less than the outstanding mortgage balance, with the lender's approval to avoid foreclosure. However, scammers may engage in various fraudulent activities:
To protect against short sale scams, homeowners should exercise caution, seek advice from trusted professionals, and verify the legitimacy of anyone offering assistance with a short sale. It's essential to work with reputable real estate agents, attorneys, or financial advisors to navigate the short sale process safely.
Loan Modification Company Scam
A loan modification company scam involves fraudulent practices by companies claiming to assist individuals in modifying their loans to more favorable terms. These scams often target homeowners facing financial difficulties and promise to negotiate with lenders on their behalf. Common tactics include charging upfront fees, making false guarantees, and providing misleading information. It is a violation of New York State law & Federal law for any non-attorney or an attorney not licensed in New York State to collect an upfront fee to provide “mortgage assistance relief services,” and/or “distressed property consulting services” (i.e. loan modification, forensic audit, loss mitigation) to a distressed New York homeowner, as such are defined & outlined in New York Real Property Law § 265-b (“NYRPL § 265-b”) and 16 CFR Part 322 (“MARS Ruling”).
These Federal and State laws were enacted as a response to the widespread consumer complaints filed by distressed homeowners whom were preyed upon and victimized by unscrupulous individuals and companies that charged hefty up-front fees for bogus loan modification services. Distressed homeowners should consider consulting directly with an attorney licensed in the state where their property is located and whom specializes in foreclosure law and loss mitigation to help obtain a loan modification.
Forensic Loan and Securitization Audit Scam
Companies charging high fees for Forensic Loan Audits (FLA) or Mortgage Securitization Analyses (MSA) claim to uncover loan document illegalities, promising benefits such as voiding mortgages or obtaining significant loan modifications. However, these claims are false and violate Federal Law (MARS Ruling). Courts consistently rule that homeowners lack standing to file MSA-based claims. Only competent attorneys, as part of foreclosure defense representation, should provide MSA or FLA services. Failing to consult an experienced attorney may render these services useless and a costly waste.
Mortgage Elimination Scam
A mortgage elimination scam typically involves fraudulent schemes aimed at convincing individuals that they can eliminate or pay off their mortgage quickly through unconventional means. Scammers may make false claims about legal loopholes, secret government programs, or special techniques to expedite mortgage repayment. Victims are often lured into paying upfront fees for these services, only to find out later that the promises were false, and they are still responsible for their mortgage. To avoid falling victim to a mortgage elimination scam, individuals should be wary of unsolicited offers, thoroughly research any company or program promising rapid mortgage elimination, and consult with legitimate financial professionals or legal advisors before taking any action related to their mortgage. Being informed and cautious is crucial in protecting oneself from such deceptive practices.
Deed fraud Scam
This scam has many different versions, but relatively speaking; they all conclude with a distressed homeowner signing over the deed to his/her property. Deed fraud in New York refers to the illegal and deceptive practices involving property deeds. This may include fraudulent transfers of property ownership, forged signatures, or deceptive schemes to manipulate property titles. Perpetrators may attempt to exploit vulnerabilities in the real estate system, making it crucial for property owners to safeguard their deeds and stay vigilant against potential scams. Homeowners are advised to regularly check property records, report any suspicious activity promptly, and seek legal assistance if they suspect deed fraud.
Mass Joinder Lawsuit Scam
This scam involves a network that advertises legal services on behalf of a law firm, targeting distressed homeowners for a class action lawsuit against lenders. Exploiting the belief that homeowners were victimized, scammers charge a hefty "consultation fee" for eligibility, despite few successful lawsuits in court.
When you obtain a mortgage loan, the bank or mortgage lender typically sells the loan to investors, and mortgage servicers assume the role of collecting and processing the loan payments. Unfortunately, the mortgage servicing industry is plagued by systemic problems -- from egregious servicer errors in managing homeowner accounts to the deceptive and abusive practices of mortgage servicers. If you are involved in a dispute with a mortgage lender or servicer, you need an experienced attorney on your side. If abusive mortgage servicing practices caused you to default on your loan and put you at risk of foreclosure, we know how to protect your rights.
Mortgage Servicing 101
Because mortgage loans are typically converted into mortgage-backed securities and other investment products, the servicing rights are often sold to companies known as mortgage servicers that manage loans accounts. The responsibilities of a mortgage servicer include:
When mistakes occur or loan servicers engage in abusive practices, borrowers may default on their loans through no fault of their own, placing them at risk of foreclosure. If you have been victimized by abusive mortgage servicing practices, call the law offices of Bruce Richardson P.C.
Common Abusive Mortgage Servicing Practices
We safeguard clients from various abusive mortgage servicing practices, including:
How the Law Offices of Bruce Richardson Can Help
If you are dealing with an unscrupulous mortgage servicer and concerned about losing your home, you need the powerful legal representation we are capable of providing. Our criminal defense background allows us to develop successful litigation strategies in lender and servicer lawsuits. Although filing a lawsuit against a lender or servicer is an uphill battle, our experienced real estate law attorneys have the know-how and tenacity to achieve successful outcomes, inside or outside the courtroom. We have a proven track record of helping our clients fight back against abusive mortgage companies.