Legal Question in Real Estate Law in California

Where's your attorney in all this? Assuming the "investor" purchased the property for value and in good faith, his title is good and your attorney should be suing, or at least threatening to sue, the former owner for "slander of title." At the very least your attorney should be filing a Motion for Relief from Lis Pendens and demanding that the former owner pay your attorney fees for filing the motion.

Mr. Stone might be right, but he assumes the former owner's suit is groundless, and that is not necessarily so.......

I agree you need an attorney. I would point out that court filings such as lawsuits and answers to lawsuits are public records, and therefore you (and anyone else) can go to the courthouse and read and research all the claims the litigating parties are making. As a non-lawyer, you can read, but should be cautious about interpreting, and court documents without legal assistance. There is a good chance, but not a 100% chance, that the former owner's lawsuit is meritless. You have a right to insist upon clean title, and a pending suit is almost always a ground for refusing to close.

March AFB?

Finally, I would advise NOT buying any property unless you can get title insurance, and I very much doubt you can buy title insurance on a property where there is a lis pendens on record.

I agree with my colleagues on this one and you should get a lawyer immediately. I would also consider suing the bank if they failed to disclose this potential.

Suits to recover property from foreclosure are generally an uphill battle but I cannot comment on the merits of this action because I do not have enough facts. The lenders/servicers have been extremely negligent and careless in their handling of loan modifications and hence if the owner tried to modify the loan and the lender screwed it up they may have a very good case.

I would suggest that you get a lawyer ASAP because you are going to need one and it will take some time and effort to get it sorted out.

Good luck.