Quote: Does adverse possession apply in the foreclosure context? Home went into foreclosure in 2008, my daughter not on deed started paying the property taxes in 2008 and wanted to save house. Deeded the house to daughter in 2009. Still fighting with the bank, but daughter has lived in home since 08, made improvements and is still paying the property taxes in 2012. Not sure if this is adverse to the bank or not since she is legal title owner since 2009, but thought I'd ask anyway.
Laws on adverse possession vary widely from state to state as to both the requisite time period, as well as the specific requisites which would entitle a claimant to perfect title through such adverse possession.
Some states have differing periods for perfecting the interest based upon different kinds of claims. For example, someone possessing under a wild or questionable deed might obtain title sooner than someone with no deed at all.
Case law also differs as to precisely the sort of open and notorious possession to the exclusion of the otherwise rightful owner is actually required.
Generally, the time periods required are much longer than that you describe and the facts you recite seem to be very weak. Since the periods to obtain title by adverse possession tend to run fairly long, it is usually quite unlikely that a claim could be perfected before a foreclosure was completed. If the lender waited for a lengthy period of time, there would more likely be a limitations defense under the note or a laches equitable defenses under the mortgage well before a claim for adverse possession could arise.
Look to the statutes and cases for your jurisdiction for a better understanding of the rights in respect of the facts in your case. Discuss the matter with an experienced real estate attorney. But I do not want to come across as overly hopeful or encouraging. While there may be some legitimate foreclosure defenses available, I am highly doubtful that adverse possession of a stranger is going to be amongst these.