Seller Screwed By Investor
Also posted in SubTo forum:
A desperate seller called me yesterday regarding her house. It was purchased "sub2" one year ago by an "investor", there is a warranty deed to trustee. I have not gotten all the details yet, but she did fax me the paperwork she signed, which included the investor CYA addendum that basically says that she understood that the mortgage had a due on sale clause and that the loan would stay in her name until it was paid of by a new buyer, that the investor and / or new buyer would be held harmless in the event the loan is called due OR goes into default for ANY reason.
Well, the house is now in pre-foreclosure because this "investor" is not paying the mortgage and has not been paying for a few months. She found out because she received the lis pendens notice.
The house was listed through a realtor by the "investor" as far as I can tell, but the real estate co is now not willing to sell it because of (what there attorney calls) an illegality. (Yes I know it is not illegal so no comments necc.) (getting details on that today)
Is there anything she can do?
One problem I have with the seller is that she is now saying that "she didn't know what she was signing and she was distressed yada yada yada" Which is BS as far as I am concerned BUT...if this "investor" had an OUNCE of ethics they should deed the house back to her immediately. and let her take care of it.
Your thoughts are welcome.
Seems to me that there was an understanding by the seller that the mortgage will be kept current during the time of its new ownership by the buyer. To the extent that this is not the case the seller might want to speak to an attorney about it. It is rather unfortunate that a jerk like this, who probably didn't know what to do with the house if he got it AND probably can't afford it anyway, get into the business.