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Seller has ongoing litigation against a lender involving an ADU loan

Hello, we are in contract to buy a real estate investment property in La Mesa, San Diego county.

During our due diligence we learnt that the seller has an active loan they took out to build an ADU from a lender called Mosaic. The seller was working with a general contractor firm who helped them file for the loan. The loan is about 100k at 10% APR over 10 years.

The lender paid the GC in full. Permitting for ADU was done, some construction work and inspection was finished (foundation was laid, utilities were brought in). The GC eventually vanished and files for bankruptcy. This was a big news in San Diego, GC being MultiTaskr.

There is a class action lawsuit against the lender implying them being part of a scheme with MultiTaskr that have defrauded hundreds of people in similar way.

Now, our title company says that there is no loan/lien associated with the property. There are no active judgements.

I am wondering if in future the seller loses the case and lender somehow gets a judgement against the seller instead can they place lien on the property retroactively. Would we have any potential exposure?

Title company says no. But I would like to get advise from folks here.

submitted by /u/coolkarniamit
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source https://www.reddit.com/r/RealEstate/comments/1h0zb3k/seller_has_ongoing_litigation_against_a_lender/
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