OMG! Possible foreclosure on a house we are under contract with in New Jersey?
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I went through this a couple years back and I got hosed! Royally.
You can try to approach the mortgage company directly and see if you can short sale it out. It really depends on the property values in the area if they will be willing to do that. They may just want to sit back and wait for the owner to lose the house.
Your contract won't really be "void" and you could sue the homeowner to force him to close the house at the price he agreed to, but the reality is if the loser is in foreclosure and cannot come up with the money in two weeks, he probably won't be able to come up with it after you spend a few thousand dollars on a lawsuit either.
Good luck, that really sucks.
Isn't that a question for your LAWYER...and the MORTAGE company ??
What no clause?
This should've shown up in the title search..
My advise..pull your offer..let the house go into foreclosure, and then swoop in and get the house for even cheaper..
OR...
j(and you will need to consult your local tax/county commission). See if you can pick up the tax lien. That will pay for itself in 5-10 years. You'll either own the house outright, OR...you'll get a 10-15% increase on your initial investment.
Good luck either way
I would think so, but talk with your agent, if you have one. That would totally change the conditions on your contract. If you have an agent, that should be their job to find out what your rights are.
Talk to a lawyer right away! You need to be prepared to go in with fists swinging if things turn sour. Whatever you do, don't be passive in the matter!
Once a bank begins legal steps to foreclose on a property the current owner who is in default on the mortgage cannot sell it. Attorney review of the contract is one thing, that is a piece of paper, but the legal status of thje property is something else and that should come up under a title search.
I used to be a loan originator and every so often questions like this would come up. You may end up buying the property from the bank. if the existing liens on the property are $50,000 higher than the sales price then it sounds like the seller was trying to commit some sort of fraud, stupidly thinking he could sell it out from under the bank, but that's not about to happen. Unless the bank is willing to eat the loss because of real estate market conditions, you may have to settle for a much higher price or drop the deal entirely. The contract probably would have been subject to satisfaction of existing liens and if that is not possible then your contract is void.
If this goes south, you can sue the seller for breach of contract. However, I doubt you'll get anything.
Anyway, the house legally belongs to the owner until it is foreclosed on and he can sell it. And in some states, the owner has a redemption period as well. Here are your only four choices at this point:
1. try to see if the listing agent/owner can negotiate a short sale and use the current purchase offer to submit to the bank.
2. Purchase the note at a discount from the lender and let it go into foreclosure and hope you can own the property at the auction. This will take cash.
3. Let the property foreclose and buy it at the auction. This will take cash as well.
4. Let the property foreclose and see if the bank ends up owning the property. Then buy it from the bank. You can use your pre-qualified loan to purchase it.
I would take the short sale route.
Regards
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