new home has no lien contract

[TBon]

My husband and I need some advice regarding the MH we currently have. In April 2000 we purchased a used MH. We moved into the house about a 1 1/2 months after we signed the closing papers. We immediately realized the house was in poor condition and contacted the dealer. After numerous shouting matches and threats with the dealer he agreed to pick up the house and deliver a new one with the approval of the lender. We are now 3 years in the new house and our family has outgrown it and are looking to lease it or sell it. We are finding that we owe far more for this house than what anyone is willing to pay for it (40K). After reviewing the closing documents we realize that we never signed closing documents ore received an purchase information on the new house. Everything that we have is for the old house which was sold two weeks after it was returned. The loan was sold 2 years ago to another lender who has no knowledge of the original house. The serial number on the title that the lender has does not match the contract. Basically there is no lien/contract on the house we presently have because there were no documents signed when we received the new house. What rights do we have? What if we want to return the house? Are we still liable if there is no contract on the house we have?

[JohnnyJ]

You need to consult a real estate attorney. You have an seemingly large amount
of legal spaghetti to untangle.

good luck

[rmurray]

An attorney seems to be the place to get proper advice on this sort of thing...You do have a contract..and owe the bank money..They will have a right to collect...maybe not reposess the home you are living in...but they will be able to sue...Get an atorney soon..

[Sandy]

I work for a bank here in WV, and happen to handle the placement of liens on titles for automobiles or manufactured homes. The scenerio listed above happens more often than most think, and it can easily be done by the Loan Officer placing a filled out substitution of collateral form in the customers file and then proceeding to have the banks lien placed on the title as agreed upon closing. This essentially just changes the collateral listing on the system and in the file ONLY, but the original agreements made in the closing are still legal and valid. Only if there is a major difference in the amount originally borrowed does a complete loan need redone. I'm sure this varies by state by state. I can see it all too well in the tri-state area that I deal with, WV-KY-OH. They can have a legally binding contract along with titles with their lien on it without it matching the contract though. You either need to call the bank itself or the Department of Motor Vehicles or equivalent in your area to see exactly who is listed as lienholder, and go from there. Do you remember signing anything after the switch was made? I wouldn't imagine them being able to do anything unless you have. Then again, I don't know what part of the country you live in and it varies greatly. Good luck.

[Sandy]

To add to the last posting, I did notice you stated that you received no purchase information on the new purchase. I would have to assume that there was not a difference price wise, so a new loan (contract) didn't have to be done as all the original numbers stayed the same. If it had changed, the whole loan would've had to be redone and a new contract drawn. As it didn't, they could just use a subsitution of collateral form and place it in the file. Here in WV, we have our customers sign it. Where you live, I have no idea. Every state has it's on laws and regulations. Some foolish, and some good. I still would discuss the situation with the bank until you are satisfied, and check who is listed if anyone is as the lienholder on the title. Either way, a contract was signed and you're bound. Just because the lien isn't on the title doesn't mean the bank doesn't have legal rights to recover what they consider theirs in case of a default situation. I do admit it would prove more difficult, but can and has been done.

[Sandy]

I also noticed that you stated that you thought about returning the house. That would be a big mistake. One may think if you return a home or vehicle to the bank, their problems are over. It just begins. Though it would be voluntary, it is still considered a reposession and will go on your credit report as such. Some people don't realize this. To be honest, I didn't even know that until I worked at the bank. Normal collection procedures then would of course try to sell the property, but it still comes back ultimately to the customer. If the amount they collect from the sale doesn't cover the full amount of the payoff, they can and have made the customers liable for the difference. Of course there have been circumstances where the bank chooses to write it off or charge it off as a loss if they see there is no way they will collect from the customer, but that goes on your credit report once again and ultimately messes you up down the road. At all costs, try to avoid any of these scenerios.

[rmurray]

Sandy...glad to see a bank person explaining the system...The worse part is if the bank charges off the amount they are obligated to send a 1099 to the IRS on the original borrowers..thus incuring a income tax obligation...Most folks do not have any idea this is happening until a year or two later when the IRS withholds an income tax refund to pay the balance of the unpaid taxes, penalty and interest..

[Elizabeth]

By living in the house and making your monthly payments to the finance company, you have established residency and more or less accepted the terms under which the home was offered to you, including paying down the actual amount due on this home [which you have been doing by making your montly payments]. You may have an action based on deceptive practice, but I seriously doubt if you can simply walk away from the home and not expect to have a shortfall on it.