Hello fellow investors. I need some help. Recorded a trustee’s deed this morning. This afternoon, received a call from Reconstrust, telling me that the owner was in the process of modification and they had an agreement not the sell the property. They would like my property back. Can they rescind a recorded deed? I already have expenses, insurance, bidding assistance etc. (property is in LA county) any suggestions would be appreciated.
They have the legal right to rescind a trustee sale at anytime even after recording the TS deed. Your costs should be minimal at this point. Don’t bother fighting this, you’ll not win. Just start looking for your next property.
There is some truth to what dizzyinvestor has said above. I just ran this by Sean O’Toole and he said “He had an agreement with them and relied on that agreement and has now suffered damages due to their error. He absolutely should be compensated”.
You would undoubtedly want to hire an attorney
that is familiar with foreclosure laws and Trustee Sales. They will certainly argue that the “This sale may be rescinded at any time” clause. You just have to ask yourself if it is worth the fight.
Michelle, I absolutely agree with both of you, but the question remains. Are there limits on when they can rescind? What if I went and borrowed money against this property, recording a Deed of Trust? Or sold it to another investor? Are there limits on when they can rescind this sale?
This is one of the reasons why title companies are so cautious when insuring foreclosures. Over the past few years we have even heard of some title companies refusing to insure the foreclosures of certain lenders. Sean has often said that “no matter what they claim the question of whether or not it was a valid sale, and whether or not they can unwind it given that you are a bonafide purchaser is something that can only be settled in court.” You are now not only out your expenses but also potential profit from the transaction. There have been a few stories in our forums where an investor has asked for interest and an additional 10k to go peacefully. This may be where the real poker game starts. If you are prepared to go to court then maybe they will settle??