MSU Red Cedar Message Board

tl;dr

The contract to buy the house is different than the closing. You can sue for specific performance because real estate is unique

I understand that the Closing is the time where the contract for sale merges into the deed. Right now, we're still under contract and, legally speaking, I'm the equitable owner of the home and can sue for specific performance. What I'm a little confused about though is how would that work. I can sue for specific performance, but that's not going to extinguish the lien already existing on the property is it? How does a specific performance suit work when a 3rd party has a lien on the property that won't be extinguished by the purcahse price? Pretty sure the court can't just tell the 3rd party that they're screwed and force a short sale can they? Is my only real remedy the ability to walk away and get my deposit back? Doesn't sound like much of a remedy at all.

Walk into Wells Fargo with a baseball bat and go to work. Pujols got his 250K Mil, time to get yours.

Its a house so nothing special. This guy has it right. If its worth it finacially then continue on with trying to get the lien removed. If its not then walk away and find another house, meanwhile get a short term lease on an apartment. Don't get emotionally involved, use your head, and you will come out on top.

What about consequential damages though? Do I get my appraisal fee and inspection fee back? Do I get reimbursed for the short-term lease I now have to sign? I don't want to simply say "I'm out" and forfeit these other damages if they are available.

I'd hope the purchase contract is written for a marketable title, free and clear of all mortgage liens. Sounds like WF just screwed themselves over by killing a deal that would have paid off the mortgage.

That I don't know but those fees are small compared to even 5K. Your talking about hundreds of dollars when the forclosure added thousands of dollars.

Would I be pissed? Absolutely and I would look at what I could legally do to recoup those costs. But at the end of the day would I drop hundreds to save thousands? Absolutely. I don't know how your contract is written but there maybe legal avenues to recoup costs. My contract when I bought my home was written in terms that the house would come into my possession without liens or back taxes for the price specified. So I am not a realestate lawyer but I assume that means if there were other costs then the original homeowner would have to satisfy any of those that may have existed. I would not be out to screw the guy but if its his responsibility its his responsibility and I would not take it on for him. Right now it sounds like he fucked up and now there is an extra 5K to be paid. If you want to pay it then do it, if not either he has to pay it or you are getting it stuck to you. Barring any negotiation with the lien holder of course.

End of the day its a business deal and sometimes they go south on you. Just because you have money into already does not mean its not a good idea to cut your losses and walk.

Oh, under no circumstances am I paying the $5K. He's going to have to pay that or arrange with his mortgage company to accept the lesser amount. The appraisal came in right at the purchase amount so I couldn't get a loan to cover the additional $5K if I wanted to (which I don't).

I'm more or less wondering how long I should wait for a response from his bank. I'm not planning on walking today, but I'm not going to sit here for another 30 days either while the bank gets its crap together.

Hopefully, this is just an error on WF's part and it can be rectified within a day or two and we can close next week sometime. If it's not an error and the seller was an idiot, then I'm going to be pretty upset about being in a short sale situation that was sprung on me the day of closing. I'm sure the seller's agent isn't going to be too pleased either.

I've already gone out of my way for this guy. I raised my offer to specifically avoid a short sale situation because I didn't want to wait for bank approval and I only needed to raise the offer by $1500 or so to do that. Figured what the heck, it's just an additional $2/month or whatever anyway. That helped him out and, presumably, was going to allow him to avoid a hit on his credit report. Then I also caved and allowed him and his children to have a normal Xmas by not demanding possession at closing and allowing him to live there, RENT FREE, until the end of the month. If it turns out that he's been hiding the fact that he's not been making his payments on time, I'm gonna be pissed.

I'd say that now that you are buying a foreclosure you ought to be able to get it a lot cheaper

I'd give them to the end of next week to close. If it can't get done in a week, it's not getting done anytime soon and you should walk.

Make sure your agent tells the seller's agent that you'll walk. The seller and his agent (who wants the commission before the house gets foreclosed) have all the motivation in the world to try and convince WF to accommodate.

I typically deal with more complex issues, but this is the basics of how I would handle it.

The total answer depends on a lot of issues which I don't know about given that they are fact specific and dependent upon the terms of the contract and the state you are in so none of this is legal advice. However the short answer, and how I would probably approach this it if I took the case, I would be looking to negotiate directly with Wells Fargo. Like any bank, they have no real interest in foreclosing on property in this market. If they can recoup the total owed on the mortgage through the sale of the house to you, they have no real interest in fighting the issue, or expending the expense on foreclosure when they can get paid for doing nothing. Furthermore, you have some leverage with Well's Fargo if they were aware of the impending sale--and even more if the approved of it. Heck, if they approved of it, sending the home into foreclosure was their fault so they shold be forced to pay any fees related to the foreclosure due to their administrative error--though I think their acquiesence, once being given the documents and having knowledge, may be enough for them to take any fees out of the interest that will be paid. Remember, these companies are taking MASSIVE hits on home sales.

The foreclosure company is a bit trickier but is simplified slightly by their relationship with Wells Fargo (either an agent or contractor). Either way, in the end they are answerable to Wells Fargo, and should Wells Fargo direct them to cease the foreclosure, they will stop. Even so, they will demand their money--however, the party with the deepest pockets and most to lose is Wells Fargo, so there is likely some leverage to gets Wells Fargo to pay and settle.

Should none of this work, if I was to litigate the issue, I would bring in all companies and the owner as Defendants--file immediately for a judicial lien on the property to cease any sale, including foreclosure. Once in this position, you have all the leverage and the reality is that once brought in, none of the parties will want to expend the large sum of money to litigate the issue. There would be a fairly fast settlement, and in the end, the property owner would get the shaft (maybe even have to pay some additional money out of pocket as the debtor) if Wells Fargo refused and you would likely get the property (Though it would probably be cheaper for you to just pay the $5,000.00).

Frankly either your agent, or the owner's agent should be able to straighten a lot of this out with a few phone calls, starting with Wells Fargo--that is what you are paying them for. However, a lawyer is always advisable, though expensive.