Our client was a private lender who lent sums of money in exchange for a first priority mortgage. The loan closed and the borrower quickly went into default. Upon an examination of the title, unbeknownst to our client, it was not in a first priority position, but a fourth priority position.
Our approach was to first fully understand the transaction that occurred and what went wrong. Second, our approach was to design a plan to rectify the situation. The issues our client was facing became worse and worse.
It was discovered that the closing agent who handled the closing did not have our client’s mortgage recorded timely. It was sent for recording and returned to the agent due to a clerical issue. However, the mortgage sat in the office for several months before being sent back for the recording. In the meantime, the borrower granted three other mortgages on the property.
We attempted to resolve the matter with the borrower, closing agent, and title insurer to no avail. In the interim, our client’s borrower declared bankruptcy, further complicating the issues. We then filed a lawsuit against the closing agent and title insurer.
This matter was extremely challenging as we had to navigate the bankruptcy court, the federal district court where we brought our case, and the other mortgage holders. Eventually, we were able to recover all amounts our client lent the borrower for our client due to the strategy employed.
