Mamamia, Home Buyer in Waxhaw, NC

Was suppose to have a back to back closing as we sit in the closing attorneys office a call comes in stating we are not closing on our new home.

Asked by Mamamia, Waxhaw, NC Sun Jan 22, 2012

The new home we are purchasing is a foreclosure their seems to be a lien on the property due to back HOA dues from the previous owner. It was a night mare we had to scramble to find shelter, and a storage shed for our belongings.So we are presently homeless living in a hotel because of this mishap. My question is who dropped the ball? And can we get reimbursed and by who? Since this is know fault of ours we did everything we was suppose to do. Thanks for any replies...

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Normally the title company is primarily responsible for verification of "free and clear title". Your lender should have had a eyeball on this issue as well.

If it is truly a "foreclosure" the owner probably will not assist in paying the debt off (lien). When the bank who has a primary interest in the property, it is suppose to satisfy all the liens and sell it with "free and clear title."

Some properties (home, townhomes, condos) have in the Covenants, Conditions, and Restrictions (CCRs) a paragraph that states that any lien placed by the HOA will be a superior lien, to any mortgage lien placed on the property after the date of the Covenants, Conditions, and Restrictions (CCRs)

At this point the bank/seller might consider paying the HOA dues in question if it was not disclosed prior to sale that there was a lien that need to be satisfied on the home..

Highest and best regards,

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2 votes Thank Flag Link Sun Jan 22, 2012
You were buying a property from Fannie Mae. You say you were assured the closing would be on a specific date. So, who assured you AND do you have that in writing? Sorry for the hassle, but anybody who assured you anything about a Fannie Mae property, didn't know what they were talking about. That's who you should ask for help from.
1 vote Thank Flag Link Sun Jan 22, 2012
Hi Mamamia,

Obviously there was some kind of lack of communication...
You should not have been in the attorney's office getting ready to sign closing paperwork if they had not received a "clear to close". The title company would not have issued a HUD1 if there was a lien to be paid prior to closing. This all would have to be settled before you could even think about closing.
You may need to consult a different attorney to see if you can recieve any recovery.

Carol Bauza
Charles Rutenberg Realty
1 vote Thank Flag Link Sun Jan 22, 2012
I am not sure what a foreclosure is. You mean it has been foreclosed at some time in the past and is now a bank owned home (aka REO)? Or is is a home in short sale? When a title search is done they often find problems with the title, that is what the title search is there to do. It would seem you would have been better off to have found the title issue earlier, but often it is found at the last minute. Good luck with it. I doubt you will find anyone to reimburse you.
1 vote Thank Flag Link Sun Jan 22, 2012
You need a real estate attorney, I don't know the details but that information should had been provided way before the closing date. Why isn't your realtor on top of this? Someone dropped the ball!
We do back to back mail aways and the normal closing all the time, they all have risk today as compared to yesturday; but it simple work if you know what the heck your doing. That's why it's important to chose the right realtor with experiance and tenacity to guide you and get the job done done! I am sorry for your trouble and sincerely wish you the best!
Web Reference:
0 votes Thank Flag Link Sun Feb 26, 2012
And that's why you don't do "back to back" closings...
Web Reference:
0 votes Thank Flag Link Mon Jan 23, 2012
Im not sure if anyone dropped the ball. As said earlier, The CCR's of the HOA or Condo Association will be superior to a mortgage and those past due fees need to be negotiated and or paid off- before closing can take place.

The issues that should have been cleared were to be cleared 1 day before closing (at least). The lender should have been informed that there were past due payments and had them cleared before-hand.

0 votes Thank Flag Link Sun Jan 22, 2012
The property is a home path property. The messed up thing is we were living in our home and insisted on a back to back closing so we wouldn't have any concerns for shelter or storage and the person buying our home was in know rush to close. But we were assured we would be closing on Friday so we ran out and got a truck we took off from work to find out we are not closing and we are people of limited means regular working people we aren't self employed we have to ask for time off. This is a terrible situation what if we didn't have a couple of dollars to the side we would be in the car sleep with our kids we need to compensated by someone. But who?
0 votes Thank Flag Link Sun Jan 22, 2012
Hi Mamamia,
If the new home is a REO, the remedy and options as to what happens if the seller cannot deliver clear title is included in the bank addendum you signed to purchase the property. Keep in mind it may not be anyone's fault. The lien may have been recently filed.
Good luck,
0 votes Thank Flag Link Sun Jan 22, 2012
Was this a short sale or regular sale. If there is a lien for HOA this is suppose to be found during the title search you should have received to review per contract prior to your closing. The seller is responsible for this issue. They signed an agreement to sell the home and that they had the right to sell. How much was is the lien? The seller needs to pay for it. If they truly are distressed with absolutely no assets or money then you may want to consider paying it if it isn't too big of a lien. 100 a night in a hotel for three weeks and 1000 in storage could be more than some liens. Maybe negotiate with the HOA as the new owners showing how it's better to get most of the money and a new paying member than holding the closing from happening and not getting paid for another year waiting for a foreclosure. Good luck.
0 votes Thank Flag Link Sun Jan 22, 2012
Your lender and the title company they were using should have caught this a long time ago. As a lender one of the first things we do when we get an accepted/ratified contract is order title. That title work will show what if any liens are on the property that need to be satisfied before we can close and the deed can be assigned.

Is this a HUD foreclosure by any chance? If so, this happens a lot because there are more people involved in managing that property.

If I were you I would first talk to your agent about how much longer you can extend your contract. Next I would find out when the bank is going to get the HOA fees taken care of. It was the bank's responsibility to take care of those fees and your lender's responsibility to mitigate that situation from the beginning. There is a good chance they will point the finger at each other but they need to work together now to address this issue quickly.

Let us know what kind of feedback you get. Good luck.
0 votes Thank Flag Link Sun Jan 22, 2012
Sad. Theoretically you should be reimbursed by the owner, but by virtue of the fact that they couldn't pay their mortgage there are probably no assets to go after. Did you have a buyer's agent? What have they said?
0 votes Thank Flag Link Sun Jan 22, 2012
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