Legal Question in Real Estate Law in Alaska
Deed of Trust and Quitclaim Deed
I live in TN. A family member lives in Homer, AK. In Sept 1998, he talked me into signing a Deed of Trust and Note on some property so he could get a loan. He said it was rented and self-supporting, that he would take care of paperwork and there was be no risk to me. Later he had me sign a Quitclaim Deed which he said deeded the property back to him and ended my involvement. In April 2002, I received an Amended Complaint for Judicial Foreclosure from someone who evidently owns the mortgage, suing me and the family member's corp. for $200,000, plus $1,800 accruing monthly. I never received the original Complaint or any notices or warnings. Since he says the property is worth more than $200,000, he simply gave it to plaintiff. He had a paralegal prepare two Answers, one for me and one for his corp. Two days ago, I received an Order from Court for pretrial phone conference next week, stating I cannot represent corp. as I am not a lawyer. It's not my corp. Family member never received Order. Sounds like I am being blamed for his non-payment. He says by giving property to plaintiff, he is absolved. But what if he is wrong, am held liable? Thank you for your assistance.
1 Answer from Attorneys
Re: Deed of Trust and Quitclaim Deed
To begin with, that paralegal is probably guilty of practicing law without a license, and this case is a good example why that is illegal. Your inquiry indicates that you are in serious trouble and should retain a licensed Alaska attorney as soon as possible. Although that will involve considerable expense, the alternative in your case is almost certain financial disaster.
The only reason for a creditor to use the expensive, cumbersome and time consuming judicial forclosure procedure is to obtain personal judgments against all of the makers of the note. This is an indication that the plaintiff does not agree that the value of the property exceeds the amount due.
In a judicial forclosure, the plaintiff gets a personal judgement against the defendants for all of his costs, interest, and attorney's fees, in addition to any amount of the debt not covered by the forced sale of the property. Please bear in mind that most real property will bring only a fraction of its full market value when sold at auction, cash only, on the courthouse steps. By comparison, a nonjudicial forclosure generally takes half as long and costs much less, but the creditor must waive any right to a personal judgment against the debtor and look only to the equity in the property to cover the debt.
Although you do not explain the involvment of the corporation, it is true that corporations are not allowed to appear in Alaska courts without an attorney. To defend the corporation, therefore, an attorney must be hired. One thing an attorney can do early on is evaluate whether the corporation is even worth defending...
This is not a problem that will go away by itself. Based on recent history, leaving defense of this case up to your relative or trying to defend it yourself will almost inevitably result in a six-figure personal judgment against you which can, without much trouble at all, be enforced against your assets in Tennesee or anywhere else in the country. It appears that substantial defenses may already have been waived. You must act decisively without further delay.
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
