Hello All,

I have been in a contract for deed agreement for a little over a year. The deed holder has now had his lawyer contact me because he can no longer pay the mortgage and is in default of the loan. I received the letter from his mortgage company at my home. The letter detailed that he is in arrears for an amount that totals approximately four of my faithfully made payments to him. The lawyers letter indicated that I should still pay him directly per the contract agreement. Um, help me out here but hasn't he breeched out contract by not holding up his end of the deal? I don't feel that it is appropriate to pay him when I now have to attempt to find financing so I don't lose my home. Any help is extremely appreciated. I feel like a fool who got lost while chasing the American dream.

Who wants you to pay directly, the lawyer? Its possible, the lawyer is trying to repair the problem to avoid foreclosure.

Unless your contract specifically states that the seller is required to keep the mortgage current, then he is not necessarily in breach yet.

If the attorney is asking for direct payments, then you ask the attorney for a letter from the seller signed and notarized, that authorizes you to pay your contractual payments directly to him. Also, have that letter explain why this is being done and what is being done to avoid foreclosure.

By the way this may actually work out to your advantage. You should see if the mortgage lender will assign the mortgage to you. In that way, you can gain ownership by having the seller sign title to you and the lender assign the loan to you.

Yes, he is not really ( normally ) in breech until they actually foreclose. Sounds bad but this is one of the bad things about contact for deeds, often the people end up losing it and you get cheated.

You have to follow exactly what the contract says, You may want ( I would) hire an attorney right now, and see if for example a deal to take over the loan or something could be arranged.