Fraudulent Conveyances

The Client

A private lending entity faced a substantial risk to their financial interests after extending a significant loan that was intended to be secured by a first-priority mortgage on a property.

The Challenge

Our client encountered an unexpected obstacle when they discovered that their mortgage was actually ranked fourth in priority instead of first. This situation arose due to clerical errors and delays by the closing agent in recording the mortgage, which allowed the borrower to secure additional mortgages on the property in the interim. The complexity of the case intensified when the borrower defaulted on the loan and subsequently filed for bankruptcy. These developments introduced additional challenges, requiring our team to navigate bankruptcy court and federal district court procedures while pursuing our client’s rights.

Our Approach

To address this multi-layered issue, our team embarked on a methodical strategy to protect our client’s investment and reclaim their financial position:

• Detailed Analysis: We began by meticulously reviewing the title documents and transaction history to identify the procedural errors that led to the mortgage ranking discrepancy.
• Strategic Litigation: Recognizing the need for assertive legal action, we initiated litigation against the closing agent for negligence in mortgage recording and against the title insurer for failing to secure our client’s intended mortgage priority.
• Navigating Bankruptcy and Federal Court: With the added complexity of the borrower’s bankruptcy filing, our attorneys utilized strategic litigation planning to maneuver through the intricacies of both bankruptcy court and federal district court systems.
• Persistent Advocacy: Our team remained resolute throughout the litigation process, advocating relentlessly on behalf of our client to ensure their financial interests were fully protected.

Through our dedicated approach and comprehensive understanding of real estate law, mortgage disputes, and creditor rights, we successfully recovered the full amount lent by our client, highlighting the importance of diligent title examination and accurate mortgage positioning.

To discuss your specific case and explore how we can assist with your legal needs, please contact us.

For more information on our experience in property disputes and creditor rights, please visit our Practice Area page, and see related services in Property Disputes and Property Contract Disputes.