Re: Subject-to gone bad…Bronchick?? - Posted by JPiper
Posted by JPiper on January 17, 2001 at 17:37:24:
Hate to jump on a guy when he’s down, but in your case I’m going to make an exception! I don’t know why you didn’t call that retired federal judge that you know. You know the one…the one who told you that incorporating wouldn’t make a difference, and that you should rely on your insurance?
Anyway, now that I got THAT out of my system, I think JB is essentially right. The lender has no recourse against your corporation. But then again, the seller may have. Then again, he may not sue you once he finds out that your corporation doesn’t have much, and how difficult it is to pierce that corporate veil. (OK, I couldn’t resist it one more time).
But dam it Tim, why on earth did you do your deal this way? You could have sold with a contract for deed so that you could keep those payments up and kick the guy out when he didn’t pay. Or, you could have given the deed as you did, but retaining an interest in the property in the form of a second mortgage, which would now allow you to step in, bring the first current, and foreclose against your buyer.
All of this would have been less stressful for both you and the original seller, less expensive that the cost to defend yourself in a potential lawsuit, and certainly would have helped the seller to keep his credit from being trashed.
Reality is that at this point your buyer does not have to do anything. They can sit there without payment UNTIL the lender forecloses. Neither you or the seller can step forward to make payments since neither of you has an interest in the property.
I wouldn’t bother talking to her attorney. The reason he didn’t call you back may well have been that he hasn’t been retained by her. I’d go directly to her…and I’d FORCEFULLY demand the deed back. When and if you get it, I’d check to see if any OTHER liens have now attached to the property. If not, I’d record it, bring the loan current, and this time resell it the correct way. And Tim, I’d make a BIG priority of this, not just make a simple phone call and drop the whole thing. This is your mistake…do what you can to remedy it.
If additional liens have attached, I’d inform the seller and give him the option of taking the property so he can protect his credit. But inform him that there are now new liens.
Sorry for the experience Tim. This isn’t a pleasant one.