Check out some similar questions!

mamaof10 · Feb 13, 2010, 02:15 PM

I am a seller in agreement for deed in Illinois.The buyers had to get their own home insurance(because we the sellers don't live there anymore)I was told by my mortgage company that the insurance premium had to be put into the escrow account and had to be included with mortgage payment.Now the buyers didn't pay the home policy for a full year and are making monthly payments to the insurance company.And the buyers have subtracted the insurance premiums from the mortgage payment each month,This is the third month that the buyers have sent us a partial payment.Now the mortgage company will not except a partial payment and is getting ready to forclose on the property.The buyers attorney told them to send a partial payment and to subtract the insurance premium and now my attorney wants us to pay the difference to keep it out of foreclosure and to avoid a lawsuit by the buyers.Also the buyers had work done without our consent and now the contractor is going to put a lien on the house.Everything the buyers have done has gone against the contract.They must have the mortgage payment in my hnd by the first of every month by the contract and it has been late every month since January of 2009.I have been in contact with my attorney since this all started,this is only getting worse.I can't pay the buyer's bills,my bills and my attorney,I don't make enough money.Any suggestions?

mamaof10 · Feb 13, 2010, 05:25 PM

The buyers in Illinois have breached the agreement for deed and are 3 months late,can I just let the mortgage company forclose on the property?Or how do I evict them?

ballengerb1 · Feb 13, 2010, 05:28 PM

We need more info. Did you sell to them? Have they taken possession?

ScottGem · Feb 13, 2010, 06:09 PM

What agreement? Who holds the mortgage? Who's name is the mortgage in? Are you selling under a sales contract or did you sell outright?

mamaof10 · Feb 13, 2010, 11:55 PM

Originally Posted by ballengerb1

We need more info. Did you sell to them? Have they taken possession?

We have an agreement for deed,they took possession of house in Nov. of 2008,it is a 5 year contract that they have to pay the full mortgage payment ,that includes insurance and taxes.they are now 3 months late on the payments ,because the mortgage company will not except a partial payment.W

mamaof10 · Feb 14, 2010, 12:05 AM

Originally Posted by ballengerb1

We need more info. Did you sell to them? Have they taken possession?

We the sellers have an agreement for deed,the buyers have 5 years to get a mortgage,the buyers must make the full mortgage payment including taxes and insurance.The buyers are now 3 months late and the mortgage company is ready to foreclose,because the mortgage company will not take a partial payment.The buyers took possession of property in November of 2008.We the sellers are the only ones on the mortgage no one else.

ScottGem · Feb 14, 2010, 02:38 AM

OK, then read the contract, what does it say about default? Normally, if the buyers default such a contract, then they revert to tenants forfeiting all monies paid. If that's the case, you send them a letter stating they are in default of the contract and you have exercised the default clause of the contract. From there you treat them as tenants. Give them a pay or quit notice according to the laws of your area. If they don't pay up, then go to your local housing court and file for an eviction order.

Since the mortgage is in your name, you do not want the foreclosure on your record.

ballengerb1 · Feb 14, 2010, 08:19 AM

The mortgage company is ready to foreclose on you not your tenants. From what you tell us you still hold the title along with your old mortgage company. That company has no agreement with your buyer, just you. You will be the ones damaged by a foreclosure. Make the payment to save your credit rating and then sue the buyer or evict them.

mamaof10 · Feb 14, 2010, 08:36 AM

I know that a foreclosure can destroy your credit.But how long does a foreclosure hurt your credit?After a foreclosure how do you fix your credit?We can not afford to make 2 mortgage payments.

Fr_Chuck · Feb 14, 2010, 09:29 AM

You will need to find them in default of their contract and void that contract before you get foreclosed on. If they are still under a valid contract when they are foreclosed then they may take legal action against you for being in breach of their contract. *** And you could end up owing them 1000's.

So you need to go to the contract and see what you are allowed to do.
Also if you allow them to be late on regular basis, they may even claim you have by your actions set this up as a informal agreement. So you need to go by that contract, declare them in defaut and either change them to a rental or evict, and then allow the foreclosure to happen

Fr_Chuck · Feb 14, 2010, 09:31 AM

Well first, after they foreclose, they may also still sue you months latter for the difference in what the loan was plus foreclosure costs and what they sell it for. So even after they do take it, you could end up having to pay them 1000's in a civil law suit ( allowed in many US states)

So how long this will effect can also depend if they sue for a judgement, which would be on record for at least 10 years.

The only way to improve credit after foreclosure ( and perhaps bankruptcy if they sue you and you can't afford to still pay) will be to pay the other bills you have on time

ScottGem · Feb 14, 2010, 10:44 AM

Why did you let them go 3 months if you are in such a precarious position? You should have started proceedings against them at the first default.

Now you need to get them out quickly so you can find a new buyer/tenant.

mamaof10 · Feb 14, 2010, 02:45 PM

My attorney and I have told the buyers that a partial payment will not be excepted by are mortgage company. Also the buyers last three checks have not been cashed because I can't make a partial payment.The mortgage company has told me that they will start foreclosure on March 1,2010 if the mortgage payments are not caught up.The mortgage company also said that the agreement for deed will be terminated if they foreclose because the mortgage company comes first because the mortgage company owns the home.Also there is a lien on the house for work that they had done and did not pay for,there is also roof damage,that they did not repair.I have told my attorney to start eviction because they have breached the contract.So far I am getting no where.

Fr_Chuck · Feb 14, 2010, 02:52 PM

You can not just "evict" you have to declare the contact in default and then evict , but of course your attorney willl know that.

Also of course the mortgage company does not have to know about any contract for deed, and the partial checks make no difference, should have in my opinoin been cashed and used to pay toward mortgage, or pay your attorney, partial payment being accepted does not make it paid or stops it from being in default.

ScottGem · Feb 14, 2010, 02:53 PM

Originally Posted by mamaof10

I have told my attorney to start eviction because they have breached the contract.So far I am getting no where.

This I don't understand. The process is pretty clear. If they are in arrears should take you no more than a month to get them out.

mamaof10 · Feb 14, 2010, 02:53 PM

Originally Posted by ScottGem

Why did you let them go 3 months if you are in such a precarious position? You should have started proceedings against them at the first default.

Now you need to get them out quickly so you can find a new buyer/tenant.

I've worked with my attorney since day one and my attorney seems to think that this will all work out,and it won't.My mortgage company wants us to put it up for a short sale,I also have a realtor to work with us on selling the house,but I have to be able to show this house,I have to get them out of the house first,so I told my attorney to start eviction now.I never allowed them to get 3 months behind,they live in Illinois and I live an another state.I have tried my hardest to start default proceedings since June of 2009.

ScottGem · Feb 14, 2010, 02:59 PM

Originally Posted by mamaof10

I've worked with my attorney since day one and my attorney seems to think that this will all work out,and it won't.My mortgage company wants us to put it up for a short sale,I also have a realtor to work with us on selling the house,but I have to be able to show this house,I have to get them out of the house first,so I told my attorney to start eviction now.I never allowed them to get 3 months behind,they live in Illinois and I live an another state.I have tried my hardest to start default proceedings since June of 2009.

Umm your attorney works for you! As Chuck and I said, you declare the contract in default, which makes them tenants, you then give them a pay or quit notice. And when they don't pay you file for eviction.

Ask your attorney if he is going to reimburse you for lost payments from these people. Tell him to do the job you are paying him for.

mamaof10 · Feb 14, 2010, 03:02 PM

Originally Posted by Fr_Chuck

you can not just "evict" you have to declare the contact in default and then evict , but of course your attorney willl know that.

Also of course the mortage company does not have to know about any contract for deed, and the partial checks make no difference, should have in my opinoin been cashed and used to pay toward mortage, or pay your attorney, partial payment being accepted does not make it paid or stops it from being in default.

Yes,the mortgage company has to know about an agreement for deed because it it filed with the record of deeds in your state.Also you can't sell a home with a clear deed if there is an agreement for deed on a property because it shows that the buyers have an interest in the property.Thats what the buyers checks are used for is strickly for the mortgage payment ,nothing else.I am sorry a partial payment being accepted does not make it paid or stops it from being in default?Please explain?

mamaof10 · Feb 14, 2010, 03:08 PM

Originally Posted by Fr_Chuck

Well first, after they foreclose, they may also still sue you months latter for the difference in what the loan was plus foreclosure costs and what they sell it for. So even after they do take it, you could end up having to pay them 1000's in a civil law suit ( allowed in many US states)

So how long this will effect can also depend if they sue for a judgement, which would be on record for at least 10 years.

The only way to improve credit after foreclosure ( and perhaps bankruptcy if they sue you and you can't afford to still pay) will be to pay the other bills you have on time

My bills are always paid on time and I already have a second mortgage,we sold the house in Illinois because we had it up for sell for 3 years and it didn't sell.We had to move because of my husband's health.We had good credit until this happened,I guess we will have to ride the storm out,I will not stop paying my current mortgage and lose the home I live in to pay for the house in Illinois!

Fr_Chuck · Feb 14, 2010, 03:14 PM

Well of course the contract for deed is actually not normally recorded, but it still can not be sold unless the new buyer will agree to honor that contract. And no there is no restriction unless the contract does, to use the checks for any specific issue.

But the real issue is that 10 days after the first paymet was not paid in full, action needed to be taken, not 3 months latter.
And of course if you did not have 6 months or more payments ahead one should never self fiancé or rent a home that has a mortgage, if you can't afford to pay the entire bill if and when the renters don't. It is why many, many owners lose the rental homes.

I have bought and sold dozens and dozens of homes on contracts, I would never ever record one at the court house. And the first day a payment is late, I either get payment or it does into default, it has to be ran as a business