Full question:
A friend of mine filed for bankruptcy last fall. Everything was filed and completed. Early this year she got a call from a friend who said some vacant land she owned was still in her name and all she needed to do was pay up on the loan to bring it up to current status and the land would still be hers. She checked with the bank and they confirmed that she could reclaim the property if she just paid the past due amount and kept the loan current. She paid up, started making payments again and put the property up for sale with a Realtor. The property sold and then she found out the same bank also had a lien on the property for more than she would get in the sale.Is there a requirement for the bank to disclose they have a lien on property they also hold a mortgage on? We were led to believe it was clear and the lien was not identified by the listing Realtor either. I believe we were both misled by the bank and now are out an additional $40,000. Is there a legal way to reclaim this money?
- Category: Real Property
- Subcategory: Sales
- Date:
- State: Alaska
Answer:
The answer will depend on all the facts and circumstances involved, such as whether a warranty deed was transferred and whether any statements were made regarding liens on the property. If not, and a quit claim deed was used, then it is the buyer’s duty to do a title search and check for liens on the property or hire a title insurance company to do so.
To constitute fraud, a misrepresentation or omission must also relate to an 'existing fact', not a promise to do something in the future, unless the person who made the promise did so without any present intent to perform it or with a positive intent not to perform it. Promises to do something in the future or a mere expression of opinion cannot be the basis of a claim of fraud unless the person stating the opinion has exclusive or superior knowledge of existing facts which are inconsistent with such opinion. The false statement or omission must be material, meaning that it was significant to the decision to be made. Sometimes, it must be shown that the plaintiff's reliance was justifiable, and that upon reasonable inquiry would not have discovered the truth of the matter. For injury or damage to be the result of fraud, it must be shown that, except for the fraud, the injury or damage would not have occurred.
To constitute fraud the misrepresentation or omission must be made knowingly and intentionally, not as a result of mistake or accident, or in negligent disregard of its truth or falsity. Also, the plaintiff must prove that the defendant intended for the plaintiff to rely upon the misrepresentation and/or omission; that the plaintiff did in fact rely upon the misrepresentation and/or omission; and that the plaintiff suffered injury or damage as a result of the fraud. Damages may include punitive damages as a punishment or public example due to the malicious nature of the fraud.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.
