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juju0126 · Mar 15, 2009, 11:36 AM

I am a 25 yr old college student and I don't know much about real estate. Well I just recently got into a owner financing contract where I put 5K down and am making monthly payments for the next 4.5 yrs. When we went to their lawyer to have the paper work done we were never told that they did not own this place that they still owed someone else for it. Then it was time to pay the insurance on the home. Well they told us they were doing us a favor by allowing us to pick up their insurance and use the same people that it would save us money that way. We paid them a full years worth of insurance and she said she would get us a receipt . Well when it came time to go get the receipt she just gave us a copy of where it showed she paid the insurance and it was in her name. I then proceeded to call their insurance company to get a copy of the policy they told me that there were already two people on the insurance and they couldn't add me because there is already another lien holder on it and we can not obtain any of the information unless my name is on the title (Which it is not yet because it is not pd off). Well I then called another insurance company whom my family are friends with and told them the situation. I was advised by them that if I am not on the insurance that if something happened to this place (which we live in a hurricane zone) then we would be screwed out the money and we needed to contact a lawyer. Well I called the lawyer they used to write up the owner financing contract and did not tell them who I was. I asked them if it was legal to owner finance a home that you do not own. I was told by the lawyer himself that no that is illegal to do that. I then proceeded to tell him that he wrote up a owner financing contract that the people who are owner financing us does not own and asked him why he did that. He then kept telling me I do not have an answer for you at this time. He told me he would call me back. About 15 minutes later the lady who is selling me the trailer called all hacked off asking me why I am calling her lawyer. Needless to say the attorney still has yet to call me back. Oh and did I mention that the lady we are buying the home and land from are friends with the lawyer and just so happened the day we did the paper work at the last minute told us her notary was out and she had to bring it next door to her friend to notarize. Anyway my question is... Is it legal for them to owner finance this home when they do not own it? Is it legal for the attorney to do the contract knowing they did not own it? What advise do you have for us on this issue? Can we sue the attorney? Can we sue the supposed owners of this place? HELP PLEASE! P.S We live in Texas :confused:

George_1950 · Mar 15, 2009, 12:11 PM

Welcome to AMHD. I'm not from Texas, but this is one of the worst deals I've ever heard of. I believe there must be some confusion because, if you do not own the home, you cannot have insurance, other than renter's insurance, and I don't believe that is what you are talking about. As for the lawyer who drafted the agreement, he cannot advise you and be ethically 'loyal' to his client. You need your own attorney, and ASAP.

juju0126 · Mar 15, 2009, 12:20 PM

Originally Posted by George_1950

Welcome to AMHD. I'm not from Texas, but this is one of the worst deals I've ever heard of. I believe there must be some confusion because, if you do not own the home, you cannot have insurance, other than renter's insurance, and I don't believe that is what you are talking about. As for the lawyer who drafted the agreement, he cannot advise you and be ethically 'loyal' to his client. You need your own attorney, and ASAP.

IT IS NOT RENTERS INSURANCE.. The lady told me the $421 we pd for a yr of insurance covers everything but the contents. Therefore it covers if someone was hurt on the property, if a hurricane blew it away, etc... Yet we can't get a receipt stating we pd it from her and I called their insurance company and they said there is already another lien holder on the insurance so we can not be added.

Fr_Chuck · Mar 15, 2009, 12:26 PM

I do it all the time as do 1000's of other people, you buy the home on a contract for deed, not a real owner finance, in a owner finance, the deed itself is changed over. But on the contract for deed, you merely have a contract to get the deed when you finish paying.

It is perfectly legal for them to do a contract for deed on a home they have financed. So they owe a bank, as long as they keep the contract with you,

So
1. if you have a contact for deed, and they merely owe a lender, this is perfectly legal,

2. you don't actually own it at this point yet on a contract merely have a contract to buy it, so you buy renters isurance and they have to provide the insurance on the home unless your contract provides for you to insure it.
BUT the insurance woul be in your name

You should not be paying the insurance on the property unless it is in your ame.

juju0126 · Mar 15, 2009, 12:30 PM

Originally Posted by Fr_Chuck

I do it all the time as do 1000's of other people, you buy the home on a contract for deed, not a real owner finance, in a owner finance, the deed itself is changed over. but on the contract for deed, you merely have a contract to get the deed when you finish paying.

It is perfectly legal for them to do a contract for deed on a home they have financed. So they owe a bank, as long as they keep the contract with you,

So
1. if you have a contact for deed, and they merley owe a lender, this is perfectly legal,

2. you don't actually own it at this point yet on a contract merely have a contract to buy it, so you buy renters isurance and they have to provide the insurnace on the home unless your contract provides for you to insure it.
BUT the insurnace woul be in your name

You should not be paying the insurnace on the property unless it is in your ame.

They never told us that they did not own it isn't that Deceptive Trade Practice? Not only that they were being deceptive because she acted like she was doing us a favor on the insurance. When in reality she was just getting us to pay their insurance.

JudyKayTee · Mar 15, 2009, 12:40 PM

Retain an Attorney. You are in over your head.

Fr_Chuck · Mar 15, 2009, 12:45 PM

If you are in a contract for deed, not a owner finance, there is nothing wrong in it

If they have a mortgage and they are listed on the deed, they do indeed own the house, they just don't own the house free and clear

As long as they have the right to transfer the deed to you at the end of the contract there is nothing wrong or illegal about it.

They are not required to tell you that they have a mortgage on the property.

As for as the insurance, that may be an issue,

Also the insurance company needs to know you live there, not the owners, since that changes the status of the coverage from a home owners to a polcy for a rental home.

You should have at least your own rental policy to cover cotents and liablity,

Having another policy to cover the house is an issue since only one policy will pay off if there is a fire,

juju0126 · Mar 15, 2009, 01:02 PM

Originally Posted by Fr_Chuck

If you are in a contract for deed, not a owner finance, there is nothing wrong in it

if they have a mortage and they are listed on the deed, they do indeed own the house, they just don't own the house free and clear

As long as they have the right to transfer the deed to you at the end of the contract there is nothing wrong or illegal about it.

They are not required to tell you that they have a mortage on the property.

As for as the insurnace, that may be an issue,

Also the insurance company needs to know you live there, not the owners, since that changes the status of the coverage from a home owners to a polcy for a rental home.

You should have at least your own rental policy to cover cotents and liablity,

Having another policy to cover the house is an issue since only one policy will pay off if there is a fire,

Well their name is no where on the title.