Nest Egg


Marlow Heights, MD--When she bought this home, Ethel made a large down payment to keep her monthly mortgage payments low. It was more than a home, it was also her nest egg.
So Ethel was understandably shocked one day, four years after she moved in, to be served with a lawsuit seeking to give the property back to its previous owner, the seller to Ethel.

It seemed the seller, Lola, had been represented in the sale by her son, Carl, who acted under a Power of Attorney.
But now Carl was deceased and Lola's remaining son, Larry, had just learned the home was sold. When Lola told Larry she had no recollection of the sale, he filed suit on Lola's behalf.

In the lawsuit, Larry claimed that when the Power of Attorney was signed Lola was under 24-hour nursing care at a convalescent home in Florida.

Out of the Past -- Four years after she moved in, Ethel's ownership was challenged.

While Lola recalled having signed "papers" at the insistence of Carl and his wife, Evi, she didn't know what the papers were about.

 

She said Carl had placed a book over the papers, so all she could see was the signature line. Evi was firm, saying "Mrs. C., if you don't sign we can't take care of you."

 

Worse yet, the lawsuit claimed that at the time of this signing Lola was mentally incompetent. If proven, such a claim could void the Power of Attorney and invalidate Ethel's deed.

Lola's attending nurse, Rose, had been present at the signing. Rose recalled that Lola was under pain medication and acted confused. The next day, Lola complained that no one ever came to see her, and had to be reminded of Carl and Evi's visit the night before. Rose also remembered the papers being covered by a book.

First American hired an attorney to defend Ethel's title. The attorney learned that the sale proceeds check, payable to Lola for $92,840, had been negotiated by Carl and Evi using the Power of Attorney.

It all came down to this: The property was all Lola had, it was her nest egg. Now it was gone, Carl was dead, Evi was not in touch, and neither Larry nor Lola knew where the money went.

After months in litigation, Larry stopped communicating with his lawyer and the lawyer withdrew from the case. The suit was dismissed. First American paid legal expenses of $24,236 on behalf of its insured, Ethel.

MORAL: Even a half-baked legal challenge can cause a homeowner with limited resources to lose their property, and this was not half-baked.

A document signed by one who is mentally incompetent may be void, having no legal effect. Likewise, a document signed by one who has been deceived about its contents, through no fault of the victim or through excusable neglect, may be voided through court action.

These hidden risks are among those covered by title insurance.

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