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Thread: The Escrow from Hell (please help) California

  1. #1
    Junior Member
    Join Date
    Apr 2007
    Location
    Santa Cruz, CA
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    1

    Default The Escrow from Hell (please help) California

    Hello, I'm looking for some advice regarding a nightmare escrow that my wife and I are in. We are attempting to purchase a house in Santa Cruz and have been in a very complicated escrow now for nearly 3 months.

    The sellers are a separated couple. The male, who is 63, is in the hospital with advanced brain cancer. His wife is from Europe and is 23 years old. She and her husband bought the house in 2005 and she was on title as community property with right of survivorship.

    The adult daughter of the male now has power of attorney and does not get along with her "stepmother," who has since gone back to Europe.

    We found out all of this about two weeks into escrow when our original title company refused to provide title insurance unless the wife signed the seller's contract and signed off all the escrow papers, including a quit claim deed.

    His daughter had gone to court in Santa Cruz with her attorney and received a signed court order allowing her to sell the house and give half the proceeds to the wife in Europe (who refuses to come back to the states for a divorce hearing.)

    The daughter and her attorney made several attempts to get the wife to sign the documents but she refused. She stated in an email that since there was already a valid court order allowing the sale of the house, she saw no point in having to fill out the documents as it was a waste of her time. The first title company did not want to get involved with this unless she signed the documents and eventually bowed out.

    Last week, the daughter and her attorney returned to superior court in Santa Cruz and got another court order signed by a judge - an interspousal transfer deed effectively removing the wife off of title.

    We now have a title company (Stewart Title Co.) who will provide title insurance.

    My questions are: Will or should Stewart's cover us if the wife ever returned here and challenged the court order? Is this something a title company will do? I'm going to ask them Monday if they will cover this contingency. If Stewart's Title Company will not cover us in this situation, what are the chances of someone contesting a court order and having it set aside. What good is a court order if they can be challenged and set aside?

    If she accepts half of the proceeds from the sale of the house, won't that fact alone make it highly unlikely for her to challenge the court order and have it set aside?

    My wife and I have invested a lot of time and frustration in this escrow and we love the house and neighborhood and we really don't want walk away if the risks are minimal.

    Sorry this is so long. Any help would be very grateful

    Karl

  2. #2
    Senior Member
    Join Date
    Oct 2006
    Location
    California
    Posts
    946

    Default

    I suspect your troubles are just about over. As long as you comply with the terms of the court order (e.g., give the estranged wife her 50% of the sales proceeds), you should be fine.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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