Default on Land Contract (sale, 2013, foreclosure)

[rtho0494]

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.

[belleislerunner]

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.

[caspper69]

Originally Posted by rtho0494

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.

[caspper69]

Originally Posted by rtho0494

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.

[jackmichigan]

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.

[Sue Armstrong]

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.

[jackmichigan]

Originally Posted by Sue Armstrong

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.

[RodriguezYMK]

I believed my kids and I are getting scammed by my ex-husband and his parents. I just got divorced finalized after 24 years of marriage on 10/31/14. My in laws hold the land contract note to my house. My ex-husband was suppose to be paying the mortgage every month. I got letter and foreclosure notice three weeks ago from the courts of michigan stating he hadn't paid mortgage since June 2012. Is it considered fraud and what can be done if I have emails from his mother to him stating amounts that were paid for the home for taxes, insurance, principals, and interests for 2012 & 2013 for him to use for his tax filing purposes. Is it possible that i subpoena his bank statements for any and all payments he may have made.

[Retroit]

Originally Posted by RodriguezYMK

I believed my kids and I are getting scammed by my ex-husband and his parents. I just got divorced finalized after 24 years of marriage on 10/31/14. My in laws hold the land contract note to my house. My ex-husband was suppose to be paying the mortgage every month. I got letter and foreclosure notice three weeks ago from the courts of michigan stating he hadn't paid mortgage since June 2012. Is it considered fraud and what can be done if I have emails from his mother to him stating amounts that were paid for the home for taxes, insurance, principals, and interests for 2012 & 2013 for him to use for his tax filing purposes. Is it possible that i subpoena his bank statements for any and all payments he may have made.

What do you consider the fraud in this case? Sounds like he simply stopped paying mortgage. His mother could have paid up to 2013, but not after.

If you want to stay in the home and can afford the mortgage, maybe you should contact the mortgage company and work something out where you can continue mortgage payments and get possession of the home.

Disclaimer: I am not a lawyer.

[jackmichigan]

Originally Posted by RodriguezYMK

I believed my kids and I are getting scammed by my ex-husband and his parents. I just got divorced finalized after 24 years of marriage on 10/31/14. My in laws hold the land contract note to my house. My ex-husband was suppose to be paying the mortgage every month. I got letter and foreclosure notice three weeks ago from the courts of michigan stating he hadn't paid mortgage since June 2012. Is it considered fraud and what can be done if I have emails from his mother to him stating amounts that were paid for the home for taxes, insurance, principals, and interests for 2012 & 2013 for him to use for his tax filing purposes. Is it possible that i subpoena his bank statements for any and all payments he may have made.

So...do your in-laws hold title to the house and have they sold it to you on a Land Contract? Is there an underlying mortgage...or was your ex-husband supposed to be making the payments on the Land Contract? Sorry, but it's difficult to understand the facts of your situation.

As for the taxes, in many--if not most--of the communities in Michigan you can look up the tax payments which have been made online. Just go to the website of the local community and look under the Assessor's Office. (In some areas in Michigan, the County maintains those records.)