Paddy Deighan is a real estate investor, attorney and advocate. This blog is dedicated to providing useful information, tips and guidelines for all of your real estate needs.
Tuesday, September 25, 2012
Quiet Title: Separating fact from Fiction
I am in Zurich Switzerland on a Venture Capital project with Credit Suisse. Some investment bankers asked me about short sales in the USA. They have a misperception about Quiet Title and it caused me to reflect a little and it became apparent to me that there are a lot of misperceptions about them here too.
A lot of the misperceptions focus on false promises offered by pirates that promise the world and deliver a small sliver of it. So, I wanted to distinguish some fact from fiction.
First, the foundation of a Quiet Title action is the securitization audit. It is an essential element of a successful Quiet Title action. Many/most of the companies offer what I refer to as “superficial” audits that really have little substantive value. An analogy is the DNA testing that is offered to the public. Most are superficial scans that are merely identifying your heritage and then making assumptions about your health based upon risk factors known to people of that region. They are not specific to you as an individual.
A securitization audit is NOT a forensic audit. Totally different animal. I describe them as follows: a securitization audit is to the mortgage or deed of trust as a forensic audit is to the loan or note. In Quiet Title actions, it is helpful, but not imperative, to have a forensic audit as well. The reason will be outlined below.
Quiet Title, if successful, strips away the mortgage or deed of trust. It removes the “lien” from the property. I describe the scenario as receiving a property “free, but not clear”. This is a significant distinction. Pirates in this space advertise that you can get a property “free and clear”. Not so!! You can remove the secured interest, but the underlying debt is still lowed!!
I will describe strategies in future blogs because I receive a lot of questions from real estate professionals about this. I the past three weeks, a judge in Florida and another in New Jersey have asked me about this…it is new for the judicial system too!!
Paddy Deighan J.D. Ph.D