Posted by Barney on May 03, 2000 at 07:24:43:
I know for sure that if the property has a V.A. insured loan in the beginning that if the payments are not made in the futuer, they will forclose. It will not matter about trusts, corp. or whatever. The V.A. will forclose on the original purchaser.
Now if the original purchaser is angry about this, and I bet he will be; he is likely to tell the V.A. to go get screwed (wrong approach). The V.A. will usually take a deed in leu of forclosure, and this would be the best way to go for the original seller. This would have some effect on the original sellers credit report (not too serious). But in the case where the original seller will not respond to the V.A. they will do the usual forclosure. Let the house sit for 1-2 years and then sell it for a lot less than it used to be worth, then add some costs (a lot) for paperwork, management, and general government inefficency to come up with a nice number from out of the blue. Then they will sue the original seller for that amount plus legal fees. They will win the suit and get a deficiency judgement against the original seller, and no the original seller cannot step in and get the house back to remedy the situation. This is a government insured loan and solutions are out of the question. Now when (not if ) the government will dog the original purchaser to death, or almost. They will grab tax refunds, and they will not let a month go by without a lot of mail from them and a collection agency or two that they use.
This will go on until the original purchaser either dies, files bankruptcy, or in my case for TEN YEARS to the day. Ten years is a long long time.
The original purchaser really needs to have this information.