Bought House From Guy Who was in an Active but Non-Disclosed Bankruptcy

[Nola]

I bought a house from a guy who I later find out was in his fourth (4) continuous filing for bankuptcy. He was using this to forestall his foreclosure. He had just been sent a 180 day bar that I also was unaware of. His bankruptcy was still active, not dismissed.

It was a person to person transaction. He didn't want to use a real estate agent because "we could save the real estate fees". He didn't disclose he was in bankruptcy and the bank didn't tell me when they gave me the payoff.
We had no title report. I refinanced the house, paid of the mortgage, letting him stay there and rent the house at his request. Seems straight enough. (Stupid, but straight.)

Now that I have brought the house out of foreclosure, he has filed a quiet title action claiming he never sold the house, and that it isn't his signature on the deed. (pretty sophisticated scam.) We did the transaction in front of a notary, who demanded photo id before he signed, etc.

My question:

1) Can I use the fact that he sold the house without court approval or knowledge while in a bankruptcy and accepted money that was non-reported, as defense against the quiet title action -

2) Can I simply negate the entire transaction as a result, get my money back and let the bankruptcy court deal with him?

3) What does this do to the quiet title action?

[HHM]

Ouch, that sucks

Unfortunately, you probably need to hire a lawyer at this point.

As for the BK, you can use any fact you want in front of the county court in which this action is pending. I am not sure you can simply "negate" the action, trying that will bring your lender into the fray and they will probably give you the middle finger.

[southernbelle]

Yikes!!! That sucks more than the scam where people rent their foreclosed homes and the unsuspecting tenants find out when they get evicted. I'm with HHM, I'd hire an atty. ASAP. He sounds like a professional scam artist that used every loophole available to his advantage.

I can't see how he could argue that it isn't his signature, because isn't that the whole point of having it notarized?? The lenders probably won't care because all they want is their money, but unfortunately you need to take this jerk to court. The bk court might do something, but it might not get you your money back. How much money was involved?

[Nola]

Yikes!!! That sucks more than the scam where people rent their foreclosed homes and the unsuspecting tenants find out when they get evicted. I'm with HHM, I'd hire an atty. ASAP. He sounds like a professional scam artist that used every loophole available to his advantage.

I can't see how he could argue that it isn't his signature, because isn't that the whole point of having it notarized?? The lenders probably won't care because all they want is their money, but unfortunately you need to take this jerk to court. The bk court might do something, but it might not get you your money back. How much money was involved?

I do have an attorney. He's "ok" but I think a little limited in strategic thinking. Apparently you simply have to say "I never signed that document" and regardless of any notary, the denial is assumed to be true until proved in court otherwise. Stinks. Buyer Beware. Additionally, he is here illegally, has a domestic violence conviction, assualt conviction and was able to convince the local Catholic University Law School to represent him for FREE as "indigent". I of course, have over $20,000 in legal fees (so far) fighting this.

So: I am looking for a legal way to either negate the contract (since he claims he never signed it) or put pressure on him to back out of the claim.

[HHM]

Ultimately, the facts on the ground will dictate this case.

You don't just look to the signature, you look at the actions of the party. How soon did he file suit, has he acted in a way that indicates he knew the house was sold, (e.g. moved his stuff out, accepted the proceeds from the sale, did the note get paid off, etc, has he done this before). Presumably, the notary will be called to testify (at the very least, you should already have a sworn affidavit from the notary and anyone else that was at the closing).

Any minor fact is enough to get the case into court, the real question is whether he really has enough evidence to stay. I doubt it, but unfortunately, it will cost you money to sort this out and you are unlikely to be able to recoup those funds.

Aside from litigating the fact, I don't see any other legal strategy you can employ. Maybe sue the bank that held the note on the house (the one that got paid off) as part of a counter suit against this guy.