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The one question I might wonder about is the size of the existing mortgage... vs the sales price ... vs the bank's possible position if the sales price is less than the mortgage (and/or two years of outstanding back-payments). Could this constitute an effort by the seller to 'impose' a short-sale on the bank? Otherwise, with a clear title, you should have no problem.
If you are ready to close, the title company has certainly, by now, cleared the sale with any first/second mortgage holders. Therefore, it's not clear what 'scam' or other you are afraid of .... except, perhaps, the 'unknown' itself (?) -- Perhaps you should contact the bank holding the mortgage and ask them the question.
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"I didn't do it, nobody saw me"
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Location: Ocala, FL
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I agree with others that if the property does go to closing, the bank who filed foreclosure documents will be paid at closing and should be no issue for the OP. I do agree that legal counsel is the best advice in this case.
How are you able to obtain a mortgage without a current survey? In Texas, all financed properties have to have a survey approved by the lender and the title company as that's part of the title insurance, insuring the property lines.
In Oregon it is an exception on the title policy unless the buyer pays for a survey to have that exception removed. Sounds like the OP's state works the same way.
OP, I'm with the others that I don't see a scam here. There is a difference between a scam, and making what you might think are unethical decisions. Their decision to stop paying is very common in the real estate world. No scam, just a business decision. Ethically dubious. Yes.
Out here only contractors can place liens on a house without a court judgement. They are also the only ones that can place liens on a house that is owned by someone else because their liens go where the work was done, and not the owner. If the house looks like it has had recent remodeling that would be the only lien concern I would have, out here. Contractors have 90 days to get the lien placed on the house after work is completed. If no work had been done, then it would be a non-issue to move forward and close. Out here a search for court judgements happens with the title search.
Who knows if the original poster understands what legal documents he is actually looking at. Maybe the bank already foreclosed. Your title company is going to want to know this info and read all of it before they insure your title.
The bank which has supposedly filed a foreclosure notice will get paid off at clsoing. The taxes are current, or the town/city has a claim at closing?
Excellent point! If the owner wasn't paying the mortgage what else what not getting paid? I don't know how it's done in the OP's neck of the woods but around here a document is recorded as part of the closing showing the current balance of any municipal fees.
Quote:
Originally Posted by Ted Bear
It sounds like you have not had an attorney with you from the beginning. Is that true?> How could this possibly happen<?
Your attorney, who did the original contract review, and has reviewed the transaction at each step along the way, will give you advice and guidance on whether to proceed. From 50,000 feet, i see no reason to not close the property and move along.
In many states, attorneys are not part of the typical real estate transaction process.
Our offered price should take care of both mortgages and at least some money will be left after. Taxes etc are current; apparently nothing else was left unpaid, as far as I can tell. Maintenance was deferred; multiple issues, including roof will need to be taken care of within a year or two.
I am looking at foreclosure notice filed by bank attorneys with the court. They give details of missed payments, principal, interest etc. I don't know where this comes in the foreclosure process but first missed payment was almost exactly two years ago.
My state does not require attorney; realtor implied no need of attorney, of course, said we were free to hire one. We didn't.
Now, have an attorney; but he is proceeding at his pace with closing 36 hrs away.
Thanks for your inputs; helped take some of the pressure away.
I do not know about your state, but in RI, the deed and new mortgage are not recorded without a title "rundown" being performed then and there up to the minute from the date of the title search so that any new liens or other encumbrances should not be overlooked.
I agree with those who say this is a situation of first time buyer's jitters.
Why does the seller go into foreclosure on this property when they and their immediate family own atleast 3 other free and clear properties, including a beach property? They make calculated decisions; good for them. But makes me really suspicious when they didn't disclose they stopped making payments and must have had bank notices in plenty.
Just curious how you could possibly know this much about the sellers financial situation.
Sometime with public records you won't see lines of credit. Its possible the owner could be up to his eyeballs in debt.
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