If a house that was purchased was purchased with a lien on the title is the contract void?

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If a house that was purchased was purchased with a lien on the title is the contract void?

My ex and I bought a house 3 years ago when the market went crazy. When he left I was unable to maintain the payments, now the house is pending foreclosure. I filed for a modification and a short sale. When those did not work out I filed for a deed in lieu. I have since been told the deed in lieu was declined due to a lien on the title from the previous owners. I did not think you could purchase a home with a lien on the title.

Asked on September 26, 2011 under Real Estate Law, Virginia

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you and your former spouse/boyfriend/girlfriend purchased real property several years ago without the benefit of a formal escrow where a preliminary report and title insurance policy was obtained, there is a distinct possibility that when you closed escrow that the lien recorded on the property your purchased at the time you acquired it was not paid off and removed as is typical in a formal escrow through a title insurance company.

Had there been a formal escrow, the escrow company as a condition of most sales would have required the person or entity having a recorded lien on the property to be paid off as a condition for your purchase where the lien would have been removed prior to you taking legal title to it.


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