My brother in law who lives in rural Texas bought some land and mobile home a few years ago. He bought it from the private owner. There was a contract, sort of a "rent to own" deal. The owner apparently didn't notify his mortgage company. Now the place is being foreclosed on. My brother in law has put a lot of money into the place. He is lokking at losing his place because the owner defaulted. He would be wasting his time suing the owner as he said the guy has no money. Does he have any options?

Has the brother tried any negotiations with the mortgage company? In all reality if he did not do this he's stuck as what the owner did was not illegal, but just borderline grey area illegal. I hate to hear about how people just take other people's money and skip on down the road. If your brother can convince the mortgage company that he is a responsible person who has a steady income, possibly they can help him retain the property. It's not a for sure thing, but well worth the effort to speak to them. As far as suing the owner, have him re-read his contract to see if there is any legal recourse open to him in the contract's wording.

Yes, If I was him, I would take all the reciepts of payments for the last year and show this to the mortgage company, saying that he is responsible and should be able to make a deal on taking the loan over or a re-fi in his name,

As for as sueing the seller, does the seller have anything, since most likely if he is losing this property he is broke anyway.

Has he filed his contract for deed at the recorders office, this at least shows he has a claim on the property if it woiuld sell for more than the mortgage. Does he know if there is a second or third mortgage?

Time for a real estate attorney to help with this

No this wasn't illegal. A contract for sale can be entered into on a mortgaged property.

If the contract was not registered, then he is going to have a bigger problem. The best bet would be to negotiate with the mortgage carrier and see if they will allow him to take over payments or give him first refusal on the property.