House Foreclosed On Seller Prior To Closing
Ask the Real Estate Lawyer: Real Estate Law Q&A
REM #LAW 648
By Ilyce R. Glink and Samuel J. Tamkin
Summary: A reader was due to close on a house and the lender foreclosed on the seller. Ilyce and Sam explain on how they may be able to save this deal.
Q: We were due to close on a house today. However the lender foreclosed on
the seller yesterday. What can we do?
A: Depending on what the lender has done and the process they have taken, you
may be able to still close on the house. In some cases, you or your attorney
can contact the lender and see if they will issue a payoff letter and permit
the closing to occur. If they give you a payoff letter and a certain time to
close, you can pay them off and they will dismiss the foreclosure proceedings.
On the other hand, if the lender has filed suit and has hired a law firm that
handles hundreds of this lender's cases, you may have a hard time finding someone
to help you. The lender's attorneys may take some time to get back to you and
the delay could cause you to lose your own loan.
You may still want to try, but make sure you understand what is going on with
the seller and his foreclosure. If the seller owed the lender more money that
what you are paying for the home, you will only be able to close if the lender
is willing to accept a short payment: a payment that is less that what is owed
to them.
The lender does not have to accept it and if they feel they can get more by
marketing the house, you may be out of luck and unable to close on the purchase.
Talk to a knowledgeable real estate attorney and get her help in this purchase.
Samuel J. Tamkin is a Chicago-based real estate attorney. Ilyce R. Glink’s latest book is 50 Simple Steps You Can Take To Sell Your Home Faster and For More Money In Any Market. If you have questions for them, write: Real Estate Matters Syndicate, PO Box 366, Glencoe, IL 60022 or contact them through Ilyce’s website www.thinkglink.com
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