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    BWFGLLC's Avatar
    BWFGLLC Posts: 2, Reputation: 1
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    #1

    Dec 14, 2008, 08:42 PM
    Foreclosing on All Inclusive Note and Trust Deed Deal
    We are in the process of foreclosing on the buyer of my second home property for continuing missing payments on an All Inclusive Note and Trust Deed deal. The problem we have is that my borrower is threatening to sue me because he claims we did not have the right to enter the transaction with him because we bought house as second home with second home rider on note and due on sale clause and sold to him couple weeks later even though he was a part of structuring this deal. Since we violated this in his eyes he says the deal is dead and we owe him. Our lender knows the title has been transferred and threatening to accelerate the loan if we do not transfer deed back in our name. The borrower will not do so and we cannot do quit claim because person has outstanding judgments attached to him so we will not be able to get title insurance. Any ideas what we can do besides foreclosure to try and get the deed. We realso concerned borrower buy our equity at foreclosure and we still stuck with notes in our name and our credit gets ruined because of a foreclosure. Help!
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #2

    Dec 15, 2008, 06:47 AM

    So you continue to forclose on them for non payment on your contract.

    If they counter sue for illegal contract, you will then defend that, but they will already be evicted most likely.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #3

    Dec 15, 2008, 07:09 AM

    This sounds like a major mess. Did you have an attorney draw up the mortgage? It also sounds to me like the buyer knew you were over your head and knew there were problems with the note and sale. So he took advantage knowing he might be able to get the contract voided.

    The only thing I can see, is that, even though, the contract may not be enforceable, that means the property goes back to you, but you might need to refund what he paid.

    I really think you need a lawyer here.
    BWFGLLC's Avatar
    BWFGLLC Posts: 2, Reputation: 1
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    #4

    Dec 15, 2008, 08:15 AM
    We are having a lawyer get involved and you are right the good thing is we will get the property back, however I was told that he has to compensate us for occupying the property so it may be one big wash at the end of the day. I was looking for other ideas in case I missed something. By the way the borrower is a celebrity and no lawyers were involved that I know of. Thanks for your input Tim
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #5

    Dec 15, 2008, 09:03 AM

    It is possible that he will be required to compensate you for at a fair rental value, for the time he occupied the property. But depending on what he has already paid, you may still have to refund him money.

    On the flip side, if this is a well know celebrity, he may not want the paid publicity of reneging on a contract.
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