Bank wants to back out od deal?

Question

I have a signed purchased ageement on a property on a forclosed home with the bank. Had a closing date 08/06. Two days before closing bank has to cancell due to "title issues" Now we find out the redemption time isn't up till 01/07. We signed a extention to agreement till then. Now 12/06 bank wants to cancell deal and relist house in the spring. I dont't want to give up deal on property. Any help?

Answer 1

Banks are one of the most regulated industries. Their mortgage guidelines strictly require Title Insurance....and you should too. If there's a problem with the Title it could affect your ownership upon purchase. My advise is let the existing lien holder resolve the title issues, if they're the same lender as the bank and mortgage involved here, don't burn your bridge with them, work with them. The last thing they want is to own the house, they want to sell it and you want to buy it so you should get along great.

Answer 2

I might be missing something here, but on the surface this doesn't make sense. A 5 month or more redepmtion period??

Assuming everyone (Bank and title company) did their jobs properly, the title work should have been submitted when the bank took the house back. They should have known about title issues much sooner than 2 days before closing. This being said, when a bank forecloses, any liens that aren't wiped out by the foreclosure are paid off by the bank (such as late taxes).

If the redemption period is not up until 1/07, the bank should not have listed the house for sale until then.

It sounds to me as thought one of two things is happening. They have realized their mistake in attempting to sell the property too early, or they did not properly handle the foreclosure proceedings.

I don't think there is anything you can do if they don't want to sell the property. You could certainly talk to a lawyer to see for sure.

I would just keep an eye on the property and jump on it as soon as they re-list.

Answer 3

That would concern me. Was title issues in regards to title seasoning or some type of lien on the property? Find out what the issue is so you can fix it. Then look into finding a hard money lender to lend you funds until you can refiance with a bank. Going through a hard money lender is expensive, but if you found a great deal, it might be worth it.

The redemption time is important because the owner can get the property back if they can come up with the money. Which gives you another option: You might want to work out a deal with the owner to front them the cash, get the property back from the bank, then turn it over to you.

Regards