For years now when I go back into the waterfront district a paint horse sits there. As I travel from town to town it will randomly appear at that town. I never bought any horses and when I tried to ride it once figuring maybe it is a free horse that belonged to me the result was getting fined. Does anyone know why this one horse appears in random spots like it is following you? I even tried to lead it to a stable once with command creature only to have it meet me in the next town, why? Has this happened to anyone and how have you dealt with it?

It has not happened to me, no. But sometimes when I fast travel there's a Bay Horse that spawns right in front of me. Do you own this horse that follows you? As in, does the cursor turn red when you hover over it?

Well that′s not always a solid sign. The Bravil house, even after you bought it, has that red cursor on the front door

I notice this as well. I have seen a female orc riding the paint horse in the Imperial Waterfront, but she never goes far.

Good catch.

OP: Just jump on the damn thing and see if the guards chase you.

Trust me, my characters have and those guards just dont give up till my character feels guilty and stop. On the plus side it did make a nice parade to chorrol and back to the Imperial City. And to this day from the first day this game was released not one of my characters have bought a horse. LOL maybe that horse is a spy.....

Let me see if I understand what you have: You stole a paint horse, and now it tends to follow you when you fast travel as a normally owned horse will do or perhaps randomly.

If that is the case, then things are not working properly. Normally, when you steal a paint horse and dismount, it will immediately begin to wander 'home'. Interestingly, a stolen bay horse will stay put when you dismount. Sorry, but I have no idea why your game is doing this. The diagnosis of 'glitch of unknown etiology' that has not been noted by others usually points in the same direction: mods that conflict with each other. If this could be the case and you want to fix it (which you may not), then the prescription would be to isolate mods until you identify the offender, then study up on that particular mod to see if there is a known conflict (via the read me or mods forum) that could relate to your situation.

Actually, those are all different paint horses owned by different people. And this is not a mod problem, it's even there in the vanilla game (I've seen it a lot when I played the Xbox version).

The reason you see them where you do is because Oblivion's AI is dumb and doesn't recognize where the stables are located, so they just park their horses next to the nearest load door to their destination when they are called to travel by horse.

The horse in the Waterfront belongs to a drug travelling Orc, according to http://uesp.net/wiki/Oblivion:Oghash_gra-Magul. I don't know why it travels with you though - are you sure it's not Prior Maborel's horse?

Never steal it at first but to remove it from the waterfront either I steal it than or use command to remove it. Even on the XBOX before I sold it the horse would appear also.......

Just lead it out into the jungle and kill it.