You’d have to be out of your mind to by a home after a foreclosure sale. Courts can ignore issues like standing and capacity and fraud and abuse of homeowners, but at the end of the line if the process is so corrupted and fatally flawed that the market will not purchase the properties, what’s the point of continuing with all this slop?
Well, for any brave investor or soul that thinks they might want to jump into the toxic stew that is fraudclosure and make their killing buying REO property, read the cautionary tale that is Bevilacqua. The question before the Supreme Court was this:
Whether a person who holds title to property by
virtue of a recorded deed, but whose title is clouded
by a possihle adverse claim due to deficiencies in a
prior foreclosure in his chain of title, has standing
to bring a petition to invalidate the claims of prior owners?
If a foreclosure mill or bank committed fraud or otherwise engaged in improper conduct (like robosigning) to get a foreclosure and I purchase the home, am I safe from claims by the prior owner?
The answer is…..NO. If you buy a home and anyone played games or cut corners along the way, you’re out of luck. Or as the headline from Bloomberg Screams:
Buyers Can’t Sue After Bad Foreclosure Sale!
A Massachusetts man who bought property in a faulty foreclosure sale isn’t the true owner and so doesn’t have the right to sue over it, the state’s high court ruled.
The Supreme Judicial Court, which in January found that banks can’t foreclose on a house if they don’t own the mortgage, went one step further in a closely watched case and said a sale after that foreclosure doesn’t transfer the property. Therefore, the buyer couldn’t bring his court action against a previous owner, the court ruled. (Full Bloomberg Article Here)