Legal Question in Real Estate Law in Pennsylvania

HELP, supposed to close on house TOMORROW, now there is a problem with the title. My mortgage lender has informed me of a title problem with the house we are buying and settlement is scheduled for tomorrow morning. Apparently the house was a foreclosure, then the bank that foreclosed on the property went bankrupt, then a company called Kondaur Capital Corp bought the property from the defunct bank for $1,200 and then turned around and sold it to us for $205,000 (nice profit!). Problem is Kondaur never recorded the title in its name so the title is still in the name of the now defunct bank. My mortgage lender says we can hold off settlement or we can continue to settle tomorrow with something called a "in-house purchase loan" that would have to be refinanced later into a regular mortgage assuming all the title problems have been cleared but until then she said we would basically be buying a house that wouldn't be ours. We have already made all of our moving arrangements and don't want to reschedule everything but is it too risky to settle tomorrow? What should we do???


Asked on 1/28/10, 7:45 am

1 Answer from Attorneys
Miriam Jacobson Retired from practice of law

Yes, you should NOT close on this house. Forget risky, you have no assurance that you will ever get good title. Have you ordered title insurance for your purchase? I don't mean title insurance for your mortgage lender. You may speak to the title insurance company about how they might insure good, marketable, insurable title for you [that is the standard for PA], but they generally do not give legal advice.

As for the mortgage lender's suggestion, why would you want to obligate yourself to pay any kind of loan, when you don't know that you will eventually get title.

You would be better off looking for a short-term rental if you cannot arrange to stay in your current home.

It is always advisable to have a lawyer representing you when you are buying a house. In a case like this, it is especially important to have legal advice.

This response is not legal advice, since I do not have all of the information that would be required, and I do not have a representation agreement with you.

* If the answers to your question confirm that you have a valid issue or worthwhile claim, your next step should almost always be to establish a dialog with a lawyer who can provide specific advice to you. Contact a lawyer in your county or township.

* Another reason for contacting a lawyer is that it is often impossible to give a good answer in the Internet Q&A format without having more information. The unique circumstances of your situation and things that you may not have thought to mention in your question may completely change the answer. If you want to be sure that you have a complete answer to your question and an understanding of what that answer means, establish a connection with a lawyer who practices in the area of your concern.

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Answered on 2/02/10, 12:10 pm


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