House of Debt: Missing document could cost Haywood County woman her dream home

By Jennifer Emert

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    HAYWOOD COUNTY, North Carolina (WLOS) — “I trusted the system, and the system let me down,” said homeowner Susan Harris as she detailed the current court battle she’s in to save her Haywood County home. She’s warning others to check on an important part of your closing paperwork that she’s missing.

The concerns raised by Harris to News 13’s Help Desk should serve as a warning for every homeowner. She’s fearful there are others out there in the same position as her as she unravels how she’s now stuck in a battle for her home.

Harris is facing foreclosure despite never missing a mortgage payment. The ordeal has turned her dream home into a house of debt.

What’s more terrifying is it could happen to you.

However, there is one tool that protects homeowners and should have them scrambling to check their closing paperwork.

HARRIS’ HAYWOOD COUNTY HOME

“It’s been a labor of love,” Harris said while working in her garden outside her 1920s home in Haywood County.

“My mother was English, and we lived in very old properties. You don’t knock them down. You fix them,” she explained.

Her efforts turned into what seemed like never-ending repairs since Harris bought the home in 2008. She says she had to redo the electricity and plumbing. Then she had to renovate and add a second bedroom when her ailing father moved in.

“I cared for him from 2014 until October of last year when he died of COVID,” Harris said.

Her connection to the World War II veteran is forever tied to the home.

“I put his cremated remains in the rose garden that I built. There’s even a sign that a friend made for me. It’s really sad,” Harris said.

THE FORECLOSURE NOTICE

Susan’s grief was compounded when she received a foreclosure notice in July of 2022.

“At first, I thought it was a scam,” Harris recalled. “It was a nightmare instead. I always pay my mortgage on time. I pay my property taxes, and yet here I am being told that my house is going to be taken from me because somebody didn’t pay a debt that they owed.”

That “somebody” turned out to be the previous owner. It’s taken 14 years to uncover their debt.

“I signed a closing that told me my property was free and clear because a title company, not once, but twice because I refinanced the property again in 2013,” Harris said. “That’s two separate title companies failed to find this trust lien.”

THE TITLE SEARCH PROCESS AND PROTECTIONS OF OWNER’S TITLE INSURANCE Real Estate Attorney and Partner Veronica Colvard, of Goosmann, Rose, Colvard, and Cramer PA Attorneys at Law, isn’t working on Harris’ case, but explained the process.

Colvard explained a title search at the Register of Deeds should find any debt.

“An attorney reviews all of that information, determines who owns the property, any liens, any judgments, restricted covenants,” Colvard explained.

When asked if a buyer would learn at that point whether their property is free and clear or whether there’s some kind of outstanding loan or mortgage, Colvard said, “Absolutely. The title search is really a risk mitigation process.”

The attorney is liable if something is missed, but only for four years and many offices only retain records for seven years. Colvard said a better safeguard for homeowners is owner’s title insurance.

“If something is missed in the search, if there are errors, if there are claims, title insurance can potentially cover that and provide those protections,” Colvard said.

This ensures the new owner isn’t responsible for claims against the previous owner. Many states, including North Carolina, require lenders or banks to have title insurance. Owner policies aren’t required.

The policy is unique from other insurance in that it protects you from before you owned the policy, forward.

“You pay one time, at the time that it is purchased, and the policy stays with you so long as you own the property,” Colvard said.

Still, if the debt belongs to the previous owner, why are they coming after Susan’s house?

“That’s a question I ask myself repeatedly day and night,” Harris replied.

The home, used as collateral, ties her to the bad debt. Bank of America, who issued the previous owner’s line of credit on the house, referred it to a collection agency. That agency filed the foreclosure.

UNCERTAIN FUTURE

Here’s where it gets tricky.

Susan’s certain she paid for owner’s title insurance, but the paperwork — often sent months after the policy is issued — is missing. The office that handled the closing was permanently closed after the attorney’s death, leaving Susan with a costly court battle and an uncertain future.

“I trusted the system, and the system let me down. I have an 8-year-old blind German Shepherd that I couldn’t take with me if I’m going to live in my car. I would have to find her a home. And I have three cats,” said Harris.

She’s warning others to have owner’s title insurance and the paperwork secured.

“No one is obligated to tell you about it, but I’m telling you now, you need to go get one because I don’t want to see anyone else go through what I’m going through. It’s a nightmare,” Harris said.

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