We certainly hope that you obtained an owner’s title insurance policy. If not, you’re not going to like this answer.
Let’s start at the top. Even if you’ve been the victim of fraud, your lender may not have much to fear because just about every lender in every residential loan transaction obtains a new lender’s title insurance policy. That lender’s policy protects the lender in exactly your situation.
If you have an owner’s title insurance policy, you too should have some financial protection from this fraud. If you obtained the policy, you must follow the instructions in the policy to file a claim with the title company. The title company, in turn, can try to settle with the rightful owner or will have to settle with you.
You will need to make sure you follow the procedure set forth in the title policy for filing your claim, including how you notify the title insurance company.
If you don’t have a title insurance policy, the lender’s title insurance company will end up settling with the lender. The title company could settle with the rightful owner and you could in turn benefit from their actions. However, if they don’t settle with the owner but instead pay off the lender, you will be out of luck.
You will need to vacate the condominium and any moving expenses and money you put down toward the condominium will be lost. As with any other fraud or theft, if you find the thief and discover that he or she has assets, you can try to go after them.
Unfortunately, the fraud you are going through is one in which you might have a hard time finding the perpetrator.
Even if you do have title insurance, you may still lose money. The title insurance company’s liability is usually limited to the amount of the policy. If you purchased the condominium for $200,000, the title company usually has a maximum obligation to pay out your loss up to $200,000. Since your loss is total and you have moving expenses into the condominium and would have expenses to move out along with other costs, you might still be out of pocket some or all of these costs.
Go through your closing documents and see if you obtained a title insurance policy, then file your claim with the title company. Since you have described a fraud, you probably should report the fraud to your local police department. Whether they decide to do anything about it, the crime should still get reported. Good luck.