Quiet Title – Not A Silver Bullet

The newest financial elixir to grace the American scene is the concept of quiet title. A lot of consumers are under the impression that a quiet title action will get them a free house. Nothing is further from the truth. Why would I know? Because I wrote a workshop for continuing legal education credits for attorneys.

The workshop has been approved in Florida, Georgia, North Carolina, Wisconsin and Nevada. I have been conducting workshops around the country on this subject and have had an opportunity to talk with homeowners facing foreclosure, real estate investors, mortgage professionals and attorneys. After understanding what the concept really is, all came away with a better understanding.

Quiet title is designed to minimize litigation. Plain and simple. When you file a this type of action you are bringing suit against anyone that has a recorded interest in your property. When you compare a foreclosure defense suit to quiet title the difference is day and night. Today’s legal system encourages homeowners to seek the counsel of attorneys to represent them in a foreclosure. But, and this is a big BUT. The attorney if not experienced in securitization, assignments, robo-signors, notary fraud and many other facets of what has really happened, will be lost in court.

Okay, now you are comfortable because your brother-in-law found you a good attorney that gets it. Here is the scenario that has occurred around the country. The well intentioned attorney represents you in court but what is he really doing? He is trying to stretch out the foreclosure process. Paying an attorney on a monthly basis instead of the bank creates cheap rent for you. But, you MUST continue to finance the efforts of your attorney. At the end of the day when the lights are turned out, the attorney comes to you and says “we won”. You won what? You won a dismissal without prejudice. This means the opposing counsel simply says to the judge, “see you next month, because we will be back”.

Now you get the picture. Foreclosure defense is based purely on your financial ability to pay for the attorney and court costs.

Now, let’s take a look at what a quiet title action is about. In this type of an action you are simply becoming the plaintiff and not the defendant. This is a major move. In a foreclosure defense action you are the defendant. But let’s reverse the scenario. Let’s put the football on the opponents two yard line and you are going to get it into the end zone. All you need is an attorney that understands this implementation of law..

A lawsuit is filed against anyone with a recorded interest. How do you find this out? You have a title search done and it will reveal who has a recorded interest or lien. I know of an example here in SW Florida where an attorney and real estate broker paid a bank $ 153,000 cash for a house in a foreclosure sale and the bank did NOT OWN THE HOUSE. Knowing who has a recorded interest is the real purpose of a quiet title action. Once you have served notice on the party/s that have a recorded interest, here is where the ice gets thick.

They MUST PROVE in court that they have an interest in your property. This has nothing to do with how much is owed. A quiet title action is heard under contract law and not tort law. Therefore the amount of the debt is NEVER debated or disputed. The argument is who has an interest that is provable. IF, you said to the Judge, “Your honor, I have a certified check to pay off my loan”. “Can you tell the opposing counsel to give me my original note back when I pay off this debt?” It will never happen because the note was used as the funding mechanism when your loan was sold on Wall St. I can go on and on about this subject, but I wanted to touch on the logic of this subject.

Once the lawsuit has been served, the defendant/s MUST answer in twenty days or in some jurisdictions, thirty days. Yes, some homeowners have won a quiet title suit and have gotten property free. BUT, that is rare. A good quiet title action will flush out the real parties in interest, giving you an opportunity to sit across the table and negotiate with the true lender. This saves thousands of dollars in litigation costs when you are dealing with pretender lenders, service companies and others that have no “skin in the game” or as the legal arena refers to “no standing”.

Respectfully, Regis Sauger Author/Speaker