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We are buying a house that is part of a bankruptcy. The court has approved the sale, but Bank of America (that holds the lien on the bankrupt property) must give a payoff quote for the sale to go through. For the past 20 days, they have kept telling our settlement company that the quote should come in soon, but every time they keep moving the deadline. The last time they said that we are in line to receive a fax with the payoff quote, but no fax has been sent.
How common is this? Can one sue them or threaten them in any way?
We are buying a house that is part of a bankruptcy. The court has approved the sale, but Bank of America (that holds the lien on the bankrupt property) must give a payoff quote for the sale to go through. For the past 20 days, they have kept telling our settlement company that the quote should come in soon, but every time they keep moving the deadline. The last time they said that we are in line to receive a fax with the payoff quote, but no fax has been sent.
How common is this? Can one sue them or threaten them in any way?
--" a house that is part of a bankruptcy "
bankruptcy ?
" Bank of America ( that holds the lien on the property) "
A friend of mine went through something very similar actually. He called the court clerk and was able to get the judge to issue a letter to BofA requesting their cooperation in the matter, which rendered the payoff quote within 48 hours. I suspect had the bank ignored the judge, he may have even issued an order to speed them along. Anything to help move the case from his docket... ya know?
Well, that's what happened in the end. After threatening them to go to court again, they immediately faxed back the payoff quote. I think they just try to delay the quote as long as they can to earn some extra days of interest, seems nothing but if you do so on a large scale it adds to the bottom line.
" Bank of America ( that holds the lien on the property) "
lien ? Is it a lien or a mortgage ?
Yes, the house was part of a bankruptcy estate, and is sold by a trustee who is managing the estate.
Yes, Bank of America made a mortgage loan to the persons who filed for bankruptcy, and they have a lien on the property that needs to be paid off at closing.
When an asset is part of a bankruptcy, my understanding is that it can be sold either free and clear of all liens, and then creditors divide the proceeds between them (with those who have secured claims going first), or it can be sold regularly, and then the proceeds of the sale must pay off any secured creditors at closing, but the creditors (in this case BoA) must still let you know how much they are owed. If they don't, they can delay the closing. BoA has been doing this for a month.
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