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Old 04-12-2012, 07:55 AM
 
1 posts, read 10,310 times
Reputation: 15
Default Default on Land Contract

I am under a land contract with my current home which expires on 4/15/2012. If I default on this land contract and decide to not refinance/finalize the purchase, am I expected to pay any attorney fees or late fees? What are the consequences? The way I understood this land contract is that I have the option to buy at the end of the contract and if I decide not to then I forfeit my investment of a down payment and any money paid toward the home.
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Old 04-12-2012, 09:30 AM
 
1,153 posts, read 1,030,299 times
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If you copy/pasted the wording in the agreement you signed we might be able to help. Otherwise - it's just wild speculation. Contract law is what dictates.
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Old 04-12-2012, 06:14 PM
 
213 posts, read 356,478 times
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Quote:
Originally Posted by rtho0494 View Post
I am under a land contract with my current home which expires on 4/15/2012. If I default on this land contract and decide to not refinance/finalize the purchase, am I expected to pay any attorney fees or late fees? What are the consequences? The way I understood this land contract is that I have the option to buy at the end of the contract and if I decide not to then I forfeit my investment of a down payment and any money paid toward the home.
Well, you certainly should have been trying to secure a mortgage prior to 3 days before the balloon is due.

But, unless you've been chronically late (30+ days), cannot qualify for a mortgage, or have a sour relationship with the land contract holder, most would be willing to negotiate an extension for you to secure financing.

Land-contract holders may or may not want their asset back. Right now, you're the owner on paper. You are responsible for the taxes, maintenance, upkeep, utilities, etc. If the land contract holder forecloses, he will then have to take on all of those obligations.

And yes, the land contract holder does have to foreclose, just like any other lender. The difference is that you only have a 90 day period to redeem the property (pay the outstanding balance in full) after the Sheriff's sale (180 days if you have already paid over 50% of the balance of the land contract). From start to finish, it'll probably take the land contract holder 120-140 days (longer if you're under the 180 day redemption period) to get you out from the day you are served with a notice of forfeiture (basically that you agreed to get financing to pay off the balloon by a certain date, and didn't).

Once the redemption period expires, you become a holdover tenant, and the (now) landlord can then get a writ of eviction. Once that happens, expect the Sheriff to come and forcibly remove you from the property.

If you cause damage to the property, have unpaid taxes that were your responsibility, or unpaid municipal water or sewer bills, the land contract holder can likely get a deficiency judgment against you as well, which you'll either have to file bankruptcy to avoid, or prepare to have someone trying to collect against you for 7 years.

Your best bet is to negotiate an extension, get moving on your financing, then deal with a traditional 30-year mortgage. Because yes, you will lose your downpayment, all monthly payments, all tax payments, all repairs or improvements, etc. All flushed down the toilet.
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Old 04-12-2012, 06:16 PM
 
213 posts, read 356,478 times
Reputation: 187
Quote:
Originally Posted by rtho0494 View Post
I am under a land contract with my current home which expires on 4/15/2012. If I default on this land contract and decide to not refinance/finalize the purchase, am I expected to pay any attorney fees or late fees? What are the consequences? The way I understood this land contract is that I have the option to buy at the end of the contract and if I decide not to then I forfeit my investment of a down payment and any money paid toward the home.
I should note also, that you misunderstood what a land contract is. You HAVE ALREADY BOUGHT. You just bought using seller financing.

The process you go through after failing to meet the obligations under the LC is NO DIFFERENT (administratively, slightly) than if you had gotten a mortgage from Bank of America for a home purchase and stopped making your payments.
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Old 04-14-2012, 08:14 PM
 
2,548 posts, read 1,624,079 times
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You already bought the house, it's not a matter of having an "option" to purchase it. Depending on the terms of your contract, they may be able to sue you for the entire amount owed, plus costs and attorney fees. If you plan to skip out on your contract, at least have the decency to talk to them and see if they would just accept a Quit Claim Deed from you to relinquish your rights in the property. That would at least save them the time and expense of going through foreclosure proceedings. They might even not report your default to credit agencies if you try to deal with them openly and fairly. Yes, you stand to lose everything you've paid to date...and potentially a whole lot more.
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Old 05-22-2014, 03:44 PM
 
1 posts, read 1,979 times
Reputation: 15
I owned my house for27 years yars ago my mortgage ballooned. My mother since is the owner and the house is aon a land contract my house has lost value and my mother wants it out of her name She is threatening foreclosure What will happen and what can I do at this point simce my credit is mot good but payments are up to date Bank of America calls 3-4 times daily to my mother number mostly when we run late on the payments.
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Old 05-22-2014, 08:45 PM
 
2,548 posts, read 1,624,079 times
Reputation: 3323
Quote:
Originally Posted by Sue Armstrong View Post
I owned my house for27 years yars ago my mortgage ballooned. My mother since is the owner and the house is aon a land contract my house has lost value and my mother wants it out of her name She is threatening foreclosure What will happen and what can I do at this point simce my credit is mot good but payments are up to date Bank of America calls 3-4 times daily to my mother number mostly when we run late on the payments.
Sorry, what you have written is too confusing to understand. Please re-write your situation if you'd like somebody to comment on it in a meaningful way.

How long have you owned your house? If 27 years, the mortgage should be nearly paid off.
Does your mother hold the Deed on the property? Are you buying it from her on Land Contract?

Try again.
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