The Value of Quiet Title Actions

By Andrew J Thompson

(For more information on this topic, contact the author at or by calling the Thompson Law Office at (877) 365-1776.)

Many homeowners have struggled with the large, national banks, trying to work out terms of a loan modification to save their home after they have fallen into default on a mortgage.  The process is laden with disruption and uncertainty as the banks fumble through mountains of paper, making a foregone underwriting decision on whether or not the homeowner qualifies for better terms and the opportunity to get out from under the problem.

The whole process, whether it is the loan modification consideration controlled by the bank, or foreclosure litigation within the court system, seems as if it is orchestrated from start to finish with the bank in charge of it all.   The courts often add reinforcement to this notion by deferring to the banks or their attorneys in how the proceedings in a foreclosure case unfold.

A “Quiet Title” action is one brought against all lienholders on the property in order to remove any liens that cannot be susbtantiated in a court of law, to address the order of priority of the liens that are valdily placed on the property, and to remedy any defects within a lien that is valid in and of itself, but where a mistake has been made in documentation or recording of the note.

Whenever there is a purchase money mortgage recorded against the property, any action to quiet title (other than foreclosure of the mortgage itself) can be very, very difficult.  The purchase money lender essentially has an extraordniary priority based on its consideration for lending the money that was used to buy the home.  This presents an interesting dilemma for homeowners when the bank’s actions have been so poorly managed, or even worse, and the homoewners have been left in a position rendering them unable to pay for the home they bought, because they unwittingly agreed to pay far more than its market value.  (This usally happens without a homeowner knowing, because of inflated appraisals, and other improper steps that the owner(s) could not have known about.)

When a homeonwer tries to take corrective action, the bank brings in an army of staff and of hired attorneys to defend its actions, however wrong they know they were.  And the basic defense, that most people accept is “you bought the house with this loan and agreed to pay it back, you either pay it back or lose the house”.

But in recent years, the terms of loans have become so oppressive, even to well-educated buyers, that once they go into default, it is difficult or nearly impossible to cure the arrearage and get it back on track.

Quiet Title actions are then a necessary tool for consideration, even if they are extremely difficult to prosecute.  The threat or reality of a quiet title claim forces the bank to think through the possibility that their own lien could be shown to be defective and removed – and in many cases, rightly so!

Banks are guilty of many errors in the lending process.  Many of these errors are much more substantive than their armies of attorneys will allow.  What if a note is dated far differently from the mortgage securing the note?  What if the notary signatures are on different pages than the signatures of the borrower?  What if signatures are not witnessed or attested?  Are these things important?

Consider the closing process itself.  Do the appraisals fully substantiate the market value of the home?  Was the homeonwer apprised of his rights?  Did the closing agent have proper authority to carry out the transaction that was done?

There are many more possibilities.  When the banks have failed in their duties, they created an economic distortion that many homeowners could not bear.  They need ot be accountable for their own actions and to the parites they misled.  This is the value of a Quiet Title action.