Home Buying in McKinney>Question Details

Txrebg, Home Buyer in McKinney, TX

Trying to purchase Texas home in short sale. Had contract w/seller, arranged with title company, awaiting nod from lender. Without notice to high

Asked by Txrebg, McKinney, TX Wed Apr 7, 2010

bidder bank foreclosed prop and bought it themselves for $12K less than my bid and are planning to ask considerably more than my $135K bid. Should't all parties been made aware of foreclosure?

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T.E. Sumner’s answer
Jason is correct that the bank is not party to your contract with the owner in pre-foreclosure.
They owe no duty to a potential buyer.
However, it is more likely than the bank wanting the property so it could sell at a higher price, that the bank department responsible for foreclosures was not advised by the seller of the impending sale. A different department was likely handling the short sale approval from the department that processes foreclosures, and the foreclosure people just didn't know.
"Never attribute to malice that which can be adequately explained by stupidity"
Web Reference: http://www.SumnerRealty.com
1 vote Thank Flag Link Fri May 14, 2010
There are absolutely no guarantees, and common courtesy goes out the window on short sales and foreclosures. The bank isn't a party to the contract and has no formal obligation to you. You are one in a long line of people who have gotten the shaft in the current environment - where the Short Sale Department may or may not communicate with the Mitigation Department, who may or may not communicate with the Foreclosure Department. If you feel you have been wronged in the process, I suggest you speak with a real estate attorney.
0 votes Thank Flag Link Fri May 14, 2010
WELCOME to the world of purchasing a short sale or foreclosure. Yes it would make sense process your sales offer HOWEVER many lenders have a dead line date IF home is not sold by xx/xx/xxxx it will be foreclosed.

Best move on it could be months before home is offered to general public IF it goes on the market OR it could be purchased by bulk investor buyer.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes Thank Flag Link Fri May 14, 2010
Txrebg:

I know you must be very disappointed & angry. A bank has no obligation to notify anyone other than the property owner & any entity that has a legal interest in the property, such as a second mortgage company, a lien holder,etc. The Bank's management decided that it could make more money selling after foreclosure rather than agreeing to a short sale. You could make an offer to buy the home from the Bank for your $135,000. However, if you do, I suggest that you put a time limit on your offer, as the Bank may not make a timely response.
0 votes Thank Flag Link Wed Apr 7, 2010
The contract you had was with the seller and not the Bank in the short sale process, even though the bank needed to approve the actual short sale. The bank can, at any time, move forward with foreclosure. When this happens, it's unfortunate obviously for the seller, but also for those like yourself. Those that have offers in that have been accepted by the seller and are now no longer valid. The bank does not have to notify you personally of the foreclosure. They do have requirements to meet when foreclosing, but to notify all parties, that is not one of them. It is an unfortunate situation, but I would suggest that if you really want the home, but not at the price they are planning on listing it at, then watch the home closely, banks drop their prices often. If nobody else jumps on it when they list it, be prepared with your buyer's agent (I'm hoping you have one, because short sales and foreclosures can be tricky) to immediately submit an offer. I would also suggest that the offer you do submit is a strong one with few to no contingencies. I wish you luck.
Web Reference: http://www.JasonPeebles.com
0 votes Thank Flag Link Wed Apr 7, 2010
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