Re: L/O seller goes into forclosure. - Posted by JPiper
Posted by JPiper on May 26, 1999 at 13:14:40:
I’m wondering what your position is in regards to this transaction? Are you sandwiched between the seller and the tenant/buyer? Or did you assign the lease/option to the tenant/buyer? Either way, if I were in EITHER your shoes or the tenant’s shoes I would be nervous as h*ll?.and that’s putting it mildly.
First, it goes without saying that a third party collection account should ALWAYS be set up to insure that the tenant’s payment is FIRST used to pay the underlying loan, and THEN the proceeds are distributed to the owner, and perhaps to you if your sandwiched in the middle of this deal. Had this been done this situation would not be occurring assuming the tenant has made their payments, and assuming that the tenant’s payment cover the loan payment.
Second, I would work with the operating premise that this seller is lying?things AREN’T ok. People don’t send cards or stop by the house trying to buy UNLESS there is something in the public records that has taken place. You need to rapidly determine what that something is. Chances are it’s a filing of a notice of default, the recording of a substitution of trustee, or some other document that may be unique to your state which is a sign that a foreclosure action has been initiated. I’d either go to the courthouse and check it out if you know how?.or have the title company do it.
I would want to make sure my option is recorded?..as in IMMEDIATELY. It’s hard to say based on your knowledge what the condition of title is right now?.but if the option is NOT recorded there is nothing to stop this seller from deeding the property to one of these buyers who’s pursuing the property. NOTHING will stop the lender from foreclosing IF they haven’t been paid.
The option gives the tenant the right to exercise their option?.defined by the terms and conditions contained in the option. It does NOT require the tenant to make an offer?.all they have to do is EXERCISE. But time is of the essence here.
This situation may be more complicated than you think?.and depending on your position in all of this?so may yours. I would IMMEDIATELY light a fire under my b*tt and dig out the information, and depending on what that information is?.I might contact an attorney for additional information.