Seller financing and buyers rights?
Say I purchased a home having used seller financing with a previous underlying mortgage and everything is going smooth for 4 or 5 months but suddenly the person the buyer is making monthly payments to gets in some financial problems and stops forwarding all mortgage payments (ex sellers payments to bank 1,500 – buyers payment to seller 1600 but seller stops) and then a lis penden is filed eventually starting the motions of foreclosure . What right’s would the buyer have? What could be done at this point? thanks!
Also I was given the title.
Similar Stories
Categories: Education 5 months, bank 1, foreclosure, lis penden, mortgage payments, motions, point thanks, seller financing
That isn’t seller financing — something doesn’t compute: is your name on the title or is the sellers name still on the title?
Normally, the buyer has a primary mortgage with a bank facilitated through a second loan from the seller (to the buyer). Or, if the seller owns the house outright, you may have a private mortgage from the seller. Is your paper work with the seller a mortgage?
If I read you correctly, the seller still carries the mortgage and you are paying him…that isn’t usually allowed with a transfer of title…almost never by mortgage companies. It sounds to me like you are legally renting-to-own. In such cases you have very few rights: the bank is first, the seller is second, and you are third.
You need to contact a lawyer now and discuss the details with an expert who can look over your paperwork and check the details.
This was a "wrap" financing arrangement. The seller was expected to forward the bank’s portion of the monthly payments to the bank. He did not do so. Now the buyer has not received any credit for those payments even tho he paid them in full.
The buyer should have been making those payments himself; directly to the bank….not to the seller.
The buyer will lose the house to the bank unless he contacts the bank and works out a payment agreement. Then the buyer goes to small claims court to get his money back from the seller. The seller has cheated the buyer by pocketing the bank’s portion of the money.