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January 13th, 2012

Part 1: Help! I’m stuck in an unsellable home

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Price ReducedSelling a home can be awfully tough these days. And some properties are particularly tricky to unload.

Consider the residence located near a railroad track or power plant, the outdated house with 1970s decor, or the infamous condo where a death or murder may have taken place.

As bad of some of these scenarios sound, real estate agents say all such homes will sell eventually; they just need the right price and the right buyer to come along.

But imagine being stuck in a home that is literally unsellable because of a dispute you’re having with your title insurance company.

That’s the situation facing Ronald Dean Baxter, a New Jersey homeowner, and his wife, Sandra. The couple desperately wants to move.

Twice the couple found potential buyers after putting their home on the market on two different occasions in 2010, yet the deals fell through each time because of a huge legal problem.

Survey says: ‘You lose’

It turns out the Baxters’ Ringwood, N.J., home encroaches on someone else’s property–a fact the couple didn’t realize when they bought their house back in May 1990. Unfortunately, there were multiple wrong surveys done, and the title insurance company the Baxters paid to do a title search didn’t catch the encroachment problem. That’s where the issue apparently began.

“I would have never purchased this home if I knew this was the situation,” says Ronald Baxter.  

Fast-forward to 2012, and the Baxters have now lived in their home for more than 20 years. But for nearly a decade, they’ve waged an on-and-off battle with their title insurer, Commonwealth Land Title Insurance Co., a division of Fidelity National Financial Inc. Fidelity operates a group of title companies that collectively makes up the largest title insurance and escrow services company in the world.

The Baxters bought an owner’s title insurance policy from Commonwealth when they first got a home loan and purchased their property. Such insurance is supposed to protect homeowners in the event a problem is found with a home’s title.

When the encroachment issue was initially discovered, Commonwealth “did inform me that they are at fault and would work with me to clear this up,” says Baxter. “I have five or six surveys, documents and letters from the title insurance company.”

But year after year has passed, and Commonwealth and its parent company, Fidelity, have since failed to make good on its promises, according to Baxter.

“I have not only spent my time for the last (eight or nine) years dealing with this, but I have also spent a lot of funds out of my pocket trying to resolve this and I am still stuck in an unsellable house,” Baxter says…

Stay tuned for part two which will be published on Monday.

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5 Responses to “Part 1: Help! I’m stuck in an unsellable home”

  1. Mecca Keyes Says: January 13th, 2012 at 6:19 pm

    Let me first start by saying I admire your work.

    I had my house on the market since last February. I live in Newark and I know the housing market and unemployment is down the drain. My house is priced at $179,900. I owe $160,000. Can I ever get out of this house?
    Would you consider a short-sale in my circumstance?

    Thank you.

  2. Mecca Keyes Says: January 14th, 2012 at 5:13 am

    I forgot to mention that I live in Newark, NJ.

  3. Omni Chaparala Says: January 14th, 2012 at 12:18 pm

    The Baxters are in a real bad situation. No one should be in such a situation. It is unfortunate not to be in a house that is unsellable.

  4. Kowalski Says: January 26th, 2012 at 12:52 pm

    Title insurance protects the mortgage lender and the property owner (if insured) against claims to the property such as a disputed property boundary line. Most mortgage lenders require the home buyer to purchase a title insurance policy in the lender’s name. This is called a Lender’s policy.Title insurance policies do not provide coverage for encroachments, easements and boundary line disputes which would be disclosed by a current certified survey. This is known as the Survey Exception. Mortgage lenders routinely require a Survey Endorsement to their loan policies which limits the scope of the Survey Exception to the specific problems disclosed by the survey. In other words, a Survey Endorsement provides coverage against possible undiscovered problems involving encroachments, easements and boundary line disputes.
    To protect yourselves as home buyers you should insist on an Owner’s Policy with a Survey Endorsement based on a professionally prepared current land survey.

  5. matt Says: August 29th, 2012 at 11:27 am

    Fidelity has done this to us as well.. They missed and Easement on our Driveway.. Now the easement holders are telling us they will remove anything they want in our 325 x 40 foot driveway.. even thought they only have the right to drive over our land they feel that they have the right to remove our Utilities, 50 year old trees and anything else the deem in their way.. Now our Title is UN-salvagable as no one will buy our home with this defect as the easement holders have more right to our land than us.. Fidelity has refused to move forward and refuses to pay us back for the home.. We have been fighting this sine 2009… and yet Fidelity Title (Lawyers Title) Refuses to make good on there Title Policy with us that clearly says if they miss an Easement there is no cap or limit to the amount they must pay us… They admitted they missed the Easement.. And know we would not have purchased this home if they had disclosed the easement to us in the Title Report.. Yet they have cost us over 300,000 in legal fees to date and still we have an unsellable Title.

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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