Once upon a time there was a foreclosure sale that was threatened to be overturned. And this is the crazy, scary story of how such a thing could happen.
Mr. Man and Mrs. Woman lived in a brick house right next door to a very untidy property which had a house of sticks in disrepair and two straw homes which were dilapidated and destroyed. The untidy property went into foreclosure, and Mr. Man and Mrs. Woman rode to the courthouse steps to buy it. Mr. Bank opened with a bid of $100, which was always his opening bid. Mr. Man bid $10,000 and the deal was done.
Mr. Man and Mrs. Woman then rode home, had their supper, and began to tidy up the very untidy property next door. They got rid of the dilapidated straw homes, they cleaned up the yard, and they began to rehabilitate the stick house to the glory of their self-satisfaction and rising property value of their own home.
After they had done much work and spent $40,000 in repairs, Mr. Man and Mrs. Woman received a letter from Mr. Bank’s attorney, who was called Mr. Wolf. Mr. Wolf huffed and he puffed and he threatened to blow the foreclosure sale down because the bid was too low. Even though it was a good faith error, Mr. Wolf was seeking to have the sale overturned.
Mr. Man and Mrs. Woman were very not happy. They discontinued the marvelous work they had begun, and they ran back to their brick house from which they could call a lawyer to defend their interest against the big bad Wolf.
The case law on this issue says that if the plaintiff makes an error, or if the buyer does anything wrong, there is reason to overturn. Also, if the plaintiff makes a mistake, for instance bids too low, that is reason to overturn the sale as well.
This story lacks an ending. It is an ongoing case in Putnam County and neither side has been awarded an unhappily ever after. So far, however, this story acts as a cautionary tale that justifies the need for title insurance, even on a foreclosure property.
